Should You Use a Financial Adviser?

04 Dec Should You Use a Financial Adviser?


Accountant working at the officeMaking large financial decisions can be daunting, whether you’re an individual looking to take your first steps into the world of investment, or a SME considering whether to take the next step in expansion. Either way, you’ve probably wondered whether or not it’s worth having a financial adviser help you make decisions during the process. Ultimately, this is down to your own circumstances, and there is no correct answer.

Making the Best Decision

Advisers will generally discuss your position in detail, and try to establish your suitability. They’ll then use their expertise and knowledge to go out and find the products and methods that best match what you require. Sometimes they will be completely independent of any organizations that offer financial products, and sometimes they will recommend their own services. In either scenario, the idea is that with the help of a financial adviser, you should be able to make a better decision than you would on your own.

The degree of help will vary widely; some advisers will simply find and give you a single option, where companies like Killik encourage you to bring your own investment ideas to them for evaluation. It’s also worth noting that advised dealings carry with them additional rights. When buying into a financial product, an organisation might give you information and leave the decision up to you – in which case you are buying purely on your own research. With advice however, there can be repercussions for the adviser if the product is mis-sold and is unsuitable. This does not of course cover the natural risk inherent in investments – they may go up or down.

Is it Right for You?

The trade-off for gaining valuable advice is that it costs money, and indeed this is really the only drawback of using a financial adviser. You have to ask yourself whether the cost of the advice is worth making the best investment decision or buying the most suitable product. In some cases, it might not be, but you should consider the following:

  • Do you have enough knowledge and experience of the financial product you’re dealing with to make a good decision?
  • Do you have the time it takes to thoroughly research what you’re getting into?
  • Do you fully understand the risks and that you may lose money by your own decision?

If you’re not confident about any of the above, then it’s probably a good idea for you to get at least some form of financial advice. There will be a fee involved, but it’s far better than the cost of not making the best decision.

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