At what point is it worth getting a Financial Advisor?

[buzzing]

I've never had any professional financial advice before, and I was wondering at what point people have considered them & found them useful. By useful, I suppose I would want them to achieve better returns with my money than I have been able to do myself.

As background, I'm early 40s and currently have savings of c. £15k in various fixed rate & easy access cash accounts plus c. £10k in a S&S ISA.

I currently save c. £500 to the S&S ISA & £250 to cash savings.

I save 10% in a pension through salary sacrifice, with work adding 7%. Pension pot is probably around £86k at the moment.

I am married though savings are separate & I'd like to keep them that way.

At these sort of numbers is there any point in a financial advisor?

A financial advisor is very likely to tell you to continue doing what you're doing, plus making sure you've paid off any debt, possibly including your mortgage now that rates are rising.

Make sure your cash savings are paying as much as possible - check on Money Supermarket.

The financial flowchart is useful

ukpersonal.finance/flowchart/

Also listening to the Meaningful Money podcast and reading/watching the associated material. Tellingly, this is by a financial adviser who spends most of his time telling people they don't need a financial advisor.

You can probably only get a better return than an IFA will cost you if you have a significant six figure sum to invest, and/or unusual circumstances, such as being decades before retirement and needing to make a lump sum provide you with an income for life, eg due to a personal injury payout due to an accident that's stopping you from working.

I don’t think many people really need an IFA these days. You sound like you can research which S&S ISA funds would suit your attitude to risk, an IFA no more knows which funds will perform better than you do, they just match your attitude to risk to a fund choice.

Lots of online articles about active vs passive funds, best funds for charges & different platforms.

Are you a higher rate taxpayer? If so, upping your pension contributions would make a lot of sense if you can afford to not have access until you retire. If you’re not, I’d balance pension & ISA contributions as the overall tax treatment is broadly similar (pension gets tax relief on the way in but is taxed on the way out, ISA contributions are usually made from taxed income but the money is tax free on the way out).

Thank you both for your advice, particularly the podcast recommendation.

As a bit of further background, we don’t have a mortgage (inheritance) or other debt and I’m borderline being a higher rate payer (£47k salary currently).

All being well, I’m set to make c £100k in the near future as I have shares in my company and although some might be reinvested I will have a larger pot to look at investing.

I live in a fairly “leafy” area and a lot of friends seem to have financial advisors so I think I’ve been caught up in thinking I need one too and that I’m missing out on huge gains by not having one.

A couple of years before retirement is often when someone needs advice as how to live off investments and pension can be something people need help planning.

Meaningful Money podcast has already been mentioned. That also has a Facebook group, a book - though not sure you would learn anything from that but may be a handy Christmas present from someone. There are online courses as well if you wanted to learn a lot more about doing financial planning yourself.

The other time people can often need help is when they get a sudden unexpected windfall. Suddenly coming in to a lot of money can throw people off course.

Financial advisors can advice on a range of subjects such as life cover.
Do you have life cover? Or critical illness cover etc.

Not sure you'd need one either tbh. Your pension pot does look low though, I'd divert your regular savings to that given you have six months salary saved and no debt.