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Is it really worth it to hire financial advice?


Money is complicated. Finances aren’t just about earning money through a job and spending it in what you want to buy. There are plenty of financial tools to help us get through life – some of which have become somehow indispensable – and all of them have their tricks and risks. When you engage in loans, investment funds, bank accounts, credit card deals, retirement funds, equity release and so many other financial products, it is very likely that you will feel overwhelmed by the complexity of the world of finances and the many possibilities that you have to manage your own money. If you make wise decisions, you can save a lot and even access things that in no other way could have been on your reach; and if you make bad decisions, you may unnecessarily loose a lot of money.

Financial advice is valuable in the sense that you will make better decisions as long as the advice itself is good. There are plenty of companies and independent advisers out there who offer to take a look at your numbers, tell you about your financial possibilities, and even help you carry out with some measures so you can make the most out of your money.

Getting financial advice is always an investment, because, of course, these services are paid for. Some charge an hourly rate, some a percentage of your invested funds, and some both. Now, is it worth it to hire a professional financial adviser, in terms of money? Will you save more than you will spend on them?

Beware of the small print

Lots of Britons have been complaining about hidden fees and high costs charged by independent financial advisers. Choosing an independent adviser is always a good idea because it has no agenda, and therefore they should tell you about your best choices, right?

Well, apparently independent financial advisers hide other sorts of danger. According to a very illustrative article published in the Express, many independent advisers, including most of the United Kingdom’s top 50 financial companies, fail to transparently disclose their fees online. These companies argue that fees are decided on a case by case basis and therefore there isn’t a single price for everyone. The actual cost of financial advice is only revealed in face-to-face meetings, after a superficial assessment of the client’s financial situation. This first meeting is usually paid – at a fixed price – and no-obligation.

So if you want to hire a financial adviser, you will have to be very careful and remember that you don’t need to accept the company’s service unless you have decided that it’s convenient for you, after taking all fees on account. It isn’t uncommon that customers go to face-to-face meetings and end up agreeing to pay the fees of the financial adviser they have in front of them, even if they’re not the best, because customers feel in compromise with the person at the other end of the table. Besides, if you have to go – and usually pay for – one meeting for each company you consider to hire, because the fees aren’t disclosed online, you will more than likely feel tired and accept a service that isn’t that convenient. In the end, you may loose money, instead of saving it.

Can a computer program provide you with financial advice?

Some companies have been developing software that consumers can use to cast some light on their financial situation. The simpler of them are calculators that help you estimate rates on loans, interest, equity and some other cyphers of the like. The most complex programmes will run a complete analysis on bank proposals, card deals, funds and fees here and there, and generate a complete report with even some advice on what you should do with our money.

Even if this software can be useful to orientate you and help you understand the actions you could take, we believe that there is nothing better than a human, professional advisor. For as much as technology has advanced, it hasn’t been able to match the human mind when considering possibilities, paying attention to details and developing strategies.

The purpose of this article is not to discourage you about looking for financial advice, depending on your finances it can even be really useful, help you get out of debt and enhance your life possibilities. All we say is you have to be careful an compare different services before hiring and advisor; and, of course, always mind the small print.