Whose advice can you trust?
Many people are not seeking financial advice when they come to retire. This may be down to a perception that financial advice is only for the affluent or wealthy, this is not the case. It may be that the financial industry has taken a hit in public confidence over the last few years for various reasons, so whose advice can you trust?
A survey carried out by life assurance provider, Friends Life indicated that 31.3% of people trust a financial adviser for guidance when planning their finances. Second to friends and family at 28.3% and third pension provider/insurer at 15.1%.
This definitely shows confidence in independent financial advice, but more needs to be done by advisers to illustrate what they can do for their clients, with a greater degree of transparency.
In a large marketplace full of financial products , often with subtle differences between them, an independent financial adviser can be the key, for those reaching retirement, to getting the best deal. The role of the adviser is to give you advice on what the most suitable products for you is and to get you the best deal based upon your circumstances.
Why use a financial adviser to buy an annuity?
If someone wants a guaranteed income for the rest of their life by buying an annuity, an adviser is able to discuss with you the pro’s and con’s of various products and how they meet your personal needs. Many products take into account different personal circumstances, such as marital status and health conditions. If you’re looking to provide an income for a husband or wife should you die first, this adds another dimension to your needs.
While a do-it-yourself annuity comparison tool can compare prices of products that are listed on the website, it cannot offer the same level of tailored advice and expertise. They are not able to suggest the correct type of annuity or whether an annuity is appropriate for you.
Those with medical conditions and increased health risks can benefit from an increasingly competitive market. Recent statistics from the Annuity Bureau show that the enhanced annuity rates offered to a smoker have increased by up to 6.28%. Statistics like this show how much you can benefit from getting the most suitable product for you, and being able to compare providers for the most competitive deal.
But how much will this all cost?
One of the main concerns people have relates to fees and costs. Independent financial advisers do not take a commission for the products they advise you on, and many offer a free initial consultation. A fee is usually one charge for the advice, once it has been established whether they can secure you more income than your current provider is offering.
It is important to note that if you don’t use an adviser, the arrangement for commission is far from clear and firms acting as brokers or introducers can receive large sums of money for a sale.
The worst case scenario is that the adviser can’t improve the level of income offered to you, that your retirement objectives have been addressed and you leave without paying a penny, knowing that you have the most suitable pension income for your retirement. Is that so bad?