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- Financial advice gives personalised recommendations based on your goals, circumstances and risk appetite
- It can be useful to support your planning around retirement, tax, investing, inheritance and big life decisions
- Advisers can charge one-off fees or ongoing fees. These can either be fixed or based on your assets and can help when decisions are complex
- AJ Bell offers guidance and adviser introductions but not tailored financial advice
Financial advice is a personalised recommendation from a qualified, regulated professional. It’s based on your own circumstances, goals and attitude to risk. Actual financial advice is different from general information or guidance on investing. This can help you understand your options but does not tell you what you as an individual should do with your money.
AJ Bell's Head of Public Policy
Rachel Vahey comments:
“Good financial advice can make a real difference to people’s lives, yet only around 9% of the population currently take regulated financial advice. So, it’s encouraging to see the FCA looking at ways to make advice simpler and more accessible.”
AJ Bell's Head of Public Policy
Rachel Vahey comments:
“Good financial advice can make a real difference to people’s lives, yet only around 9% of the population currently take regulated financial advice. So, it’s encouraging to see the FCA looking at ways to make advice simpler and more accessible.”
What are the benefits of financial advice?
Financial advice can help provide clarity and confidence when making important decisions about your money.
An adviser can take the time to understand your personal circumstances, goals and priorities, and help you create a plan that is tailored to your needs.
Depending on your situation, financial advice may help you:
- Understand your options and make informed financial decisions
- Plan for retirement and understand how much income you may need
- Make the most of tax allowances and reliefs available to you
- Review pensions, investments and savings as part of a broader financial plan
- Manage major life events, such as retirement, inheritance, divorce or selling a business
- Stay on track towards your long-term financial goals
- Gain reassurance and confidence during periods of market uncertainty
Financial advice is not right for everyone, and the level of support required will vary from person to person. Some people may benefit from a one-off conversation about a specific issue, while others may prefer ongoing support and regular reviews.
If you're unsure whether advice is right for you, speaking to an adviser can help you understand the options available and decide what level of support, if any, would be appropriate for your circumstances.
Do I need financial advice?
Financial advice can be valuable when the decisions are more significant, when your situation is more complex, or when you want confidence that your plans are joined up. For example, you may consider financial advice if you’re thinking about retirement, drawing an income, investing a larger sum, doing inheritance planning, looking to achieve tax efficiency, or supporting your family’s future.
How much does financial advice cost?
Financial advisers charge for their services in different ways, depending on the type and complexity of support that you need.
Typically, advice charges fall into two broad categories:
Initial advice fees
A one-off charge for providing recommendations or creating a financial plan. This may cover work such as reviewing your circumstances, assessing your objectives and making recommendations.
Ongoing advice fees
If you choose to receive ongoing support, advisers may charge an ongoing fee for services such as regular reviews, updates to your financial plan and access to ongoing guidance and support.
How charges are calculated varies between firms. Some advisers charge a fixed fee, while others charge a percentage of the assets they advise on. Some may offer a combination of both approaches.
Before you decide whether to proceed, any advice provider should clearly explain its charges and give you information about the costs involved. You will have the opportunity to review these charges before deciding whether to proceed.
Advice is not only for the very wealthy
Some people assume financial advice is only relevant if they have a very high level of wealth. In practice, advice can help a much broader group of people who might want support making important financial decisions, especially where the cost of getting it wrong could be meaningful.
Where to get financial advice
You have different options to access financial advice and consider what support is right for you. Depending on your needs, you can:
- Ask to be introduced to a financial advice firm: If you would like a more structured route, you can complete our short form and, with your permission, we can share your details with an advice firm that we believe may be a good fit for your needs.
- Read free guidance and education: If you want to learn more before taking any action, you can explore AJ Bell’s help and education content or free guidance services such as MoneyHelper.
- Find a financial adviser yourself: If you would rather carry out your own search, you can use a financial adviser directory such as Unbiased to compare firms and make contact directly.
AI for financial advice
Dan Coatsworth, Head of Markets at AJ Bell, says:
“There is a huge difference between getting information from a computer and a qualified expert. AI is unregulated and there is no protection if you make an investment off the back of an AI suggestion, and it goes wrong. In contrast, authorised financial advisers are regulated and using them grants you access to the Financial Ombudsman Service (FOS) if things go wrong, such as receiving the wrong advice. A financial adviser doesn’t guarantee you will make money, but you have protection against unsuitable advice such as being recommended a high-risk investment when you explicitly asked for a low-risk one.”
A study by the Financial Conduct Authority (FCA) found that 18 to 40-year-olds who already own or are considering investments trust AI (56%) more than TV and radio (47%), press (46%) or social media influencers (29%). Though 73% of those surveyed by the FCA are aware AI can provide inaccurate information. If you are going to invest without consulting a financial adviser, it’s important to ensure you do your own investment research and that any information you rely on comes from a reliable source.
Remember:
- AI can help inform the investment research process but shouldn’t be relied upon solely
- It’s important to look for reliable sources of information as AI systems are still learning and might serve up incorrect facts or details
- You should be aware of the differences from a compensation perspective between getting information from a computer and a qualified financial adviser
- A bad experience with AI risks undermining your confidence in putting money away to provide for your future
Does AJ Bell offer financial advice?
AJ Bell provides execution-only investment services. We do not give personal financial advice. But we can help you understand the different types of support available and, if you would like, help you connect with a financial advice firm.
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