Do you need a financial adviser?


As Spear’s readers will already be aware, engaging a wealth manager is essential for high-net-worth and ultra-high-net-worth individuals who wish to protect and grow their wealth.

These financial experts provide valuable guidance on a range of topics, from property acquisitions to retirement planning, while working towards an agreed goal, which might be liquidity, growth or legacy. 

[See also: The best wealth managers for ultra-high-net-worth clients in 2023]


For those who are unsure whether to consult an expert, or the best time to do so, Spear’s has created the essential guide for when you need to decide who to turn to for financial advice. 

What is the difference between a wealth manager and a financial adviser?

Financial advisers and wealth managers offer similar services. However the latter typically focus on UHNW or HNW individuals and can provide a more holistic approach to finances. Wealth managers give their clients financial advice, but they will also help with succession matters, tax advice and more tailored financial strategies to preserve and increase wealth. This often involves working closely with clients and over longer periods of time, in order to provide long-term and comprehensive financial care.

For financial advisers, the focus is on selling the best-fitting products to individuals looking to make a financial decision, at any stage of their life or career. Whether it is to plan your retirement, buy a property, inherit, or simply save money, a financial adviser will recommend the most suitable products. For example, they would suggest a determined savings account, ISA or investment plan from the company that is most relevant to your needs and situation.

Investment counsellor Rebecca Cretney tells Spear’s that ‘financial advising […] is important for everyone, be they high or low net worth. It is an integral part of what wealth management companies do.’

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What do you need a financial adviser for?

Dealing with finances is time-consuming but can also be a potential risk. Having control over your capital is not only important to make the most out of it, but by knowing rules and regulations, experts also help avoid unintentional tort and negligence.

There are several types of financial advisers specialising in different areas. While a lot of them will help with financial planning in general, it is important to know what they can help you with – and how. 

Investment

Investing is one of the most common ways of profiting from your wealth. However, it can also be risky to venture into it without appropriate knowledge or experience. An investment specialist can assist you in predicting whether risky investments will do well in the future, and advise you on the most relevant options for you, including insurance deals. They will also be able to help with building a portfolio catered to your specific needs and preferences for the future.

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Mortgage

Before thinking about taking a mortgage, consulting a specialist is a must. Not only will they be able to find mortgage deals among numerous trusted resources, but they will also help build an application and redirect it to relevant companies. Specialised financial advisers are the best way to ensure you don’t commit to the wrong contract and get the best out of your lender.

Savings

From short-term plans to long-term goals, an adviser will help you prepare your finances to achieve what you want or need. Experts will assist you with organising your future through retirement planning while setting up a saving scheme for your children or family’s future.

In the UK, financial advisers need to be registered with the Financial Conduct Authority (FCA) / Image: Shutterstock

How to find a suitable financial adviser

As a financial adviser’s main focus is to find the best options for your specific needs and situation, it is essential to find the right one for you. For that, it is important to know what type of advice you are looking for and match your priorities’ with an adviser’s area of expertise. Most advisers offer a free initial consultation for both parties to make sure the pairing is a good match.

Different countries have different regulations when it comes to financial advice. In the UK, for example, financial advisers need to be registered with the Financial Conduct Authority (FCA), have signed up to a code of ethics and have a minimum level of qualifications. A certified adviser will certainly be more trustworthy and dependable – two necessary qualities when handling financial affairs.

[See also: How should UHNWs protect against the risks of AI?]

Though, however rare it may be, by having access to your personal information, financial advisers can have the power to scam you or commit fraud. To avoid that, find a regulated adviser, make sure the situation is always clear and transparent and check that your sign-off is required for withdrawals and transfers.

For Cretney, when choosing a financial adviser, ‘it is important to consider whether they offer the potential to be a long-term partner to your financial goals.’ She says the main considerations should be: ‘Do they take the time to really listen to you and understand not only your wealth objectives and goals, but who you are? Do they challenge you? Do they really advise, or just order take?’

While Cretney recognises other factors such as fees and track record should be at the forefront of decision-making, ‘this should never trump a long-term relationship of trust.’

More from Spear’s: The best accountants and tax advisers for high-net-worth individuals in the UK in 2023


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