It seems as though more and more people are starting to realise just how helpful it is to have a financial planner in their corner.
Recent research from Royal London reinforces this, as it reveals that 74% of consumers who pay for advice report their satisfaction levels as ranging from “good” to “very satisfied”.
Moreover, the number of clients who believe the advice they receive is “excellent” or “good” value for money has risen from 54% in 2023 to 66% in 2024.
Having a comprehensive “blueprint” to follow can provide clarity about your aspirations and help you focus on what matters most to you.
Working with a planner makes this even more valuable, as they tailor their expertise to your unique circumstances.
With this in mind, continue reading to discover the value of financial planning, and five ways it could help you achieve your long-term goals.
1. Your financial plan is centred around your goals
A truly comprehensive financial plan starts with your goals. Indeed, your planner’s first step will typically be to understand what you want to achieve and how your assets need to evolve to make this a reality.
Vague aspirations like “growing my savings” can make it challenging to determine your progress and work out whether you’re on track.
A financial planner can guide you in setting clear and actionable goals. For instance, if your main aim is to enjoy a comfortable retirement, they could help you figure out the income you’ll need to maintain your desired lifestyle.
From there, they could show you how to grow your assets to meet this target. So, instead of a vague goal like “having enough for retirement”, it becomes more concrete, such as “I want to retire by the age of 60 with a pension fund of at least £1 million”.
Moreover, financial planners are highly skilled at identifying any gaps in your financial plan that might arise from life changes, such as getting married, moving house, or changing jobs.
These changes can significantly affect your finances and often go unnoticed. For instance, you might not realise that your new job doesn’t include a death in service benefit, leaving your loved ones without adequate cover.
Since a planner can spot and address these gaps by reviewing your situation holistically, they ensure that your plan is both comprehensive and aligned with your circumstances, even if these or your goals change over time.
By setting these clear targets and placing them at the centre of your financial plan, you might find you’re better positioned to grow the value of your assets and remain motivated to stay the course.
2. You could identify the necessary steps to achieve the outcome you desire
Once you’ve established clear goals, it’s worth breaking down the steps needed to achieve them.
For example, if you wish to build a nest egg for your child, you might wonder:
- How much do I need to save each month?
- Should I use a Junior ISA or a savings account?
- Should I invest the money or keep it in cash?
- What can I do to ensure my child uses the funds wisely?
A financial planner can help answer these questions, tailoring their advice to your specific circumstances. There is no “one size fits all” solution, after all.
If your timeline for building the nest egg spans a decade or more, investing might be the better option due to its growth potential over the long term.
Conversely, if you’re planning to give the money to your child within two years to support their higher education, cash savings could be the wiser option.
Since your planner will take the time to understand your unique situation, they can help you choose the “right” option for you. This could make you feel more secure and potentially help you reach your targets sooner.
3. A planner could help you navigate tax challenges and make the most of allowances
Tax planning is often one of the more complicated aspects of managing your finances. From understanding Income Tax bands to navigating pitfalls such as the 60% tax trap, tax rules can be difficult to understand.
Read more: Could you fall victim to the 60% tax trap?
This is where a financial planner’s expertise becomes invaluable.
They could help you identify opportunities to use tax allowances and reliefs to your advantage. For instance, your planner could ensure you’re making sufficient contributions to tax-efficient accounts, such as your ISA and pension, or guide you through strategies to mitigate Inheritance Tax.