Can a figure be put on the value of advice? There has been much comment of late surrounding this topic. As might be expected, much of that comment has centered around the costs and value of Independent Financial Advice.
From an investment perspective, the greatest value we feel we provide is ensuring our clients remain disciplined and do not make knee-jerk decisions at times of heightened uncertainty in the markets, this applies both when sections of the markets are rapidly rising as well as falling.
Markets are driven by sentiment and helping clients to take a step outside of that sentiment and moderate their investment ‘behaviour’ by not increasing risk in their portfolio when markets are rising and similarly, not jumping out of the markets when they fall (a tactic that cements any losses to that point in time). Instead, helping clients make well informed, careful decisions, is where we believe we add considerable value. This is both to the ultimate performance of a portfolio – many academic studies have concluded that behavioural coaching can add between 1% and 2% per year – as well as to the financial wellbeing of the client i.e. peace of mind.
Clearly, our expertise in investments is core to our service. There are six distinct elements of Lowes investment advice that delivers value year after year for our clients. Strategic asset allocation, i.e. the setting of long-term allocations between equities, bonds, cash and other asset classes, alongside effective use of tax wrappers, allowances and exemptions and cost effectively investing, can all have a compounding effect on wealth creation. Spending strategy is how we use our wealth to help maintain our lifestyle in retirement, which is equally as important as accumulating the wealth.
Two pieces of research help illustrate the point around value that can often be overlooked by those trying to equate it to investment performance figures and costs.
Research by Scottish Widows indicates that two of the biggest reasons people do not get to grips with making all-important, long term financial plans are time and stress. People said it was too time-consuming and stressful to identify and compare the right savings and investment products for their needs, as well as having to understand the potential short and long-term tax implications, to then have to review their situation on a regular basis and make changes as appropriate.
It highlighted that in a world that is becoming ever busier and more complex, people were finding it difficult to create the time and mental space to deal with their wealth management issues.
This is one of the primary reasons that people choose to work with Lowes as an Independent Financial Adviser. An IFA will have their finger on the pulse of the markets; listening to someone’s short to long-term financial needs, an IFA can recommend the best savings and investment strategies and products for their individual needs, as well as provide valuable insight and advice in respect of potential tax issues and how they might be mitigated.
Similarly, a piece of research by Canada Life found that a large number of people over the age of 45 looking to make provision for their loved ones after their death, often feel conflicted by their desire to pass on their wealth and the need to ensure they have a big enough retirement pot saved to cover them later in life.
One of the benefits of using an Independent Financial Adviser is the ability to plan ahead and calculate how much you will need to fund your retirement, including any later life care, then planning to achieve these objectives and devising a strategy to help pass on assets on to beneficiaries.
Lowes provide a variety of services, such as selecting investments, retirement and estate planning, guidance on taxation, educational planning for children and inter-generational planning too.
To book a free initial consultation with a Lowes Consultant:
Call: 0191 281 8811