A combination of the rising cost of living, UK economic situation, changes to tax legislation and geopolitical issues, have been driving up demand for financial advice over recent years. Gershom Chan, Head of Financial Planning, considers some of the reasons for the growing demand for trusted Independent Financial Advice to help with financial and investment planning.

With the current uncertainties in the economy and the markets, more and more people have been recognising the value of independent financial advice to help in their tax and investment strategies and deliver more surety over their long term financial goals.

Tax management has always been a key reason people seek out Independent Financial Advice. The significant rise in the number of people now paying inheritance tax on their estate has seen more families affected and with the nil rate band frozen until April 2028, the next three to four years will see more people caught in the net.

In addition, frozen personal tax bands, tax allowances and exemptions will start to see more people become liable for tax in other areas. This will include some people moving into a higher rate tax band, which can have a knock-on effect on the rate at which other taxes are paid. And the lowering of the CGT exemption amount will need these tax liabilities to be managed more carefully.

Pensions are another area where people can get caught out. Taking money out of a pension injudiciously could result in a jump up in tax bracket and/or if a large sum is taken, HMRC determines that sum as a regular monthly income and taxes it accordingly. Helping clients navigate their path through complicated tax and pensions legislation is where our technical teams come to the fore.

Managing money for life goals

The cost of living crisis has also brought into sharp focus the need for people to manage their finances effectively. People looking to successfully balance their income with
expenses, whilst also saving for goals such as home ownership, education or retirement, sensibly have been seeking out professional advice.

Likewise, economic uncertainties have acted as a catalyst. There is plenty to contend with at the moment – volatility in stock and bond markets, the looming threat of a recession, longer term inflation issues, and interest rate rises among them. These factors have prompted a growing number of individuals to want to better understand the market conditions, evaluate their investments, and be helped in managing investment and risk within their portfolios.

If this isn’t enough, geopolitical issues, such as Brexit, the war in Ukraine, and tensions between China and the US, among others, have played their part in building on the uncertainty people are feeling.

Independent Financial Advice not only helps establish a financial planning strategy aligned to individual circumstances and goals, but it also ensures financial plans receive regular review and, where necessary, are adapted to the changing economic and investment landscape.

Our aim is to help people make better financial decisions and have the best chance of achieving their goals and building a more secure financial future.

Peace of mind

Over and above better management of tax and investments, one of the key motivators that I have come across for people to seek help from an Independent Financial Adviser is the peace of mind it brings with it. Clients tell me that knowing their financial planning, pension, tax and investment arrangements are being overseen and arranged by professionals, takes a weight off their shoulders.

This is backed up by recent research by Royal London. The assurer found that people receiving advice feel more confident about their ability to cope. In a survey among consumers, nearly half (46%) said they’re extremely or very worried about the cost of living, compared to just 21% of advised clients.

Clare Moffat, Head of Technical at Royal London, summed it up nicely in my view, saying: “Having a financial adviser to actively manage a client’s wealth brings many benefits, other than just the expected financial benefits. It’s the softer skills that advisers deliver alongside advice, like reassurance and peace of mind, that bring the  value of financial advice to life for clients, helping them to feel better about themselves and their finances, especially in times of crisis.”

With over 50 years of helping clients under our belt, Lowes has decades of knowledge and experience, which we use on behalf of our clients to help them get through periods of uncertainty like we are currently experiencing.

If you know someone who might benefit from having Lowes at their side, please do put them in touch.

Lowes Financial Management is authorised and regulated by the Financial Conduct Authority.