'Is cash the best investment for me?'

24th February 2018

Savers Question: 

Is cash the best investment for me, or should I be seeking financial advice?

 

After years of low interest rates, many people are talking to me about moving their money away from cash. 

The question is, is it worth getting a financial adviser to advise you, in short, do financial advisers add any real value?

Recent reports from ILC-UK and Vanguard all conclude that advisers do add significant value to clients, net of fees – although the exact amount of added value varied depending on individual circumstances.

Some of the findings are as follows:

The value of financial advice – ILC-UK (2017)
The ‘affluent but advised’ accumulated on average £12,363 (or 17%) more in liquid financial assets than the affluent and non-advised group and £30,882 (or 16%) more in pension wealth (total £43,245).

Adviser’s Alpha:  Putting a value on your value – Vanguard (2015)
The report concludes that an adviser adds up to 3% additional net return per annum, which when accumulated over a number of years can be significant. 

Where does this added value grow from? The following points offer a brief explanation of how this value is accumulated through financial planning.

Asset allocation

Building a portfolio based on solid investment principles adds tangible returns to long-term growth.

Rebalancing of portfolios

Keeping a portfolio’s risk and return profile on course by ensuring the higher risk elements of a portfolio do not start to dominate after periods of strong growth.

Cost-effectiveness of investments selected

Effective cost control improves returns by adding value directly to the bottom line of investments.

Behavioural coaching

Helping clients remain focused on their long term goals at times of heightened uncertainty and to avoid costly pitfalls.

Tax allowances

By saving tax on investment returns, the net return increases, without taking on any additional investment risk.

Spending strategy

Spending from taxable accounts first means an increasing proportion of the remaining portfolio will be tax-sheltered.

In our view it is important to take advice from someone who is not dependent on investing your money to earn their fee. Surely it makes sense to take advice from a someone who is paid to provide you with specific financial planning, rather than just investing your money.  

Whether you need financial advice will depend on several factors such as how complicated your finances and personal circumstances are and your short and long-term goals, to name just a couple.

Everyone should have the opportunity to speak to a professional, even if it is to check that they are already doing the right thing. However, the key is to choose an adviser who will offer you genuine value and imparitial advice.

If you’d like to speak to such a person, to look at all your options, we can steer you in the right direction because over the years we have developed trusted relationships with other industry experts - including financial advisers.

Indeed, our sister company The Private Office (TPO) might be the right choice, although their charging structure means that they are better value for people with more complex affairs. They have a rare status in the adviser world, being Independent (not restricted), Chartered (highest qualification) and have expertise in cash savings based on our whole-of-market, unbiased research.

This is probably the reason they have been consistently ranked in the top UK 25 Financial Advisers for the last 6 years and have over 2,200 long term satisfied and grateful clients where value has been added.

Mrs W said recently:

Thank you for your help and advice over the years which means we're in the fortunate position of me being able to retire early. We're both very grateful and are looking forward to the new adventures we're about to undertake.

However, if TPO is not right for you, the good news is that there are plenty of other independent financial advisers available with the right qualifications.

If you think it would help to talk to someone, contact Claire or Leighton on 0800 011 9705 and they will help you find the most appropriate person to speak to. 

Or if you'd prefer, you can submit your details online and we'll ensure the best person, suited to your specific needs, gives you a call back. 

 

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