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What planners are asked most often

  Should I pay off my mortgage as soon as possible?

Whilst society tends to envy those that have paid off their mortgage early (and psychologically it must feel brilliant), a financial robot in today’s climate would almost certainly not. The robots reasoning would be that the cost of borrowing, i.e. the interest rate you are paying on your mortgage, is currently very low. With many people securing an interest rate below 2%, which is the government’s target for inflation, this means that the real ‘value’ of your mortgage debt is decreasing as the cost of living and wage increases outpace it. Added to this, if you can achieve investment growth above the interest rate you are paying, the difference between the two is the ‘premium’ you can make by investing cash, rather than overpaying. Of course everyone’s circumstances are different and investments can go down as well as up. This answer was provided by boosst an Accredited Financial Planning Firm™, find out more.

  What’s the benefit of consolidating all my pensions?

On a higher level, consolidating multiple pensions into a single pot can help remove the administrative burden of having 5 or 6 different providers sending you statements and having to update them all if you move, or figuring out where to take money from when you come to retire, which are reason enough to consider. Looking at it the issue closer however, people typically don’t have 5 or 6 active pensions that they are paying into, they tend to have amassed them from different jobs over a number of decades. This tends to mean that the pension contracts/products are not the most up to date and having never been reviewed can often be paying higher charges, not offer the same options to access the funds or be invested poorly. The exercise of consolidation can act as a financial 'spring clean’, taking the outdated pensions and updating them to lower cost, better performing and more accessible products. This answer was provided by boosst an Accredited Financial Planning Firm™, find out more.

  Do I have to take all the tax free cash from my pension straight away?

Usually not - however this can depend on the type of pension you have. Modern pension contracts allow you to ‘flexibly’ access your funds, meaning you don’t have to take all your tax free cash immediately or lose it, you can draw it as and when to pay for expenses throughout your life journey. There are contracts where this isn’t the case, such as ‘Defined Benefit’ AKA Final Salary pensions where you do have to take the tax free lump sum when the pension income starts, so it’s always worth speaking with a professional if you are unsure. This answer was provided by boosst an Accredited Financial Planning Firm™, find out more.

  Is it true that if I need long term care, my spouse could get thrown out the house to pay for it?

This is a common concern and I’ve seen numerous clients pay large amounts setup complicated and expensive trust arrangements that they are told will stop this happening. Firstly the majority of these arrangements are unproven to work and can likely be challenged by the council and unwound. However more importantly, the value of your property will not be taken into account during the means testing calculation if you spouse or a child (under 18) still lives in the property. Savings and assets above the amount of £23,500 will be factored into the calculation however. This answer was provided by boosst an Accredited Financial Planning Firm™, find out more.

10 questions you should ask before choosing your financial planner

It is important to ask questions to ensure you find the most competent, trustworthy and qualified professional best suited to your needs. Although it takes some time, before you meet up with any financial planner it's a good idea to contact at least three different firms or individuals so that you can get a much better idea of how they might differ and what you want.

It's also important to be clear on exactly what service you are looking for. In some ways interviewing a potential planner is similar to interviewing a person who is applying for a job you’ve posted. In a way, they are – they want to be your personal money manager.

  What are your qualifications?

This should be a straightforward task but the myriad of different professional qualifications that exist for financial advisers and planners in the UK can make it a little more complex. Financial planning is a detailed, comprehensive process and requires an individual who has proven experience and skill in the planning process itself.

Make sure you have a good understanding of the planner’s qualifications and if, in fact, they are a qualified planner. As such, check if they hold any advanced level professional credentials, such as the internationally recognised CERTIFIED FINANCIAL PLANNERTM certification – the global standard of excellence in Financial Planning which is equivalent to an honours degree.

  What experience do you have?

Experience is an important consideration in choosing any professional so don’t hesitate to ask how long the planner has been in practice, the firms they have been associated with and how this experience relates to their current practice. The CISI recommends that you choose a financial planner who has at least two years experience in working directly with individuals and planning their financial needs.

  What services do you offer?

The services a financial planner offers will vary and depend on their credentials, areas of expertise and the firm for which they work. Some planners offer financial planning advice on a range of topics but do not sell financial products, while others provide advice in specific areas such as taxation. Those who sell financial products, or who give investment advice, must be authorised and registered with the Financial Conduct Authority (FCA).

  What is your approach to financial planning?

The types of services a financial planner will provide will vary. Some planners prefer to develop detailed financial plans encompassing all of a client's financial goals. Others choose to work in specific areas such as taxation, estate planning, insurance and investments. Ask whether the individual deals only with clients with specific net worth and income levels, and whether the planner will help you implement the plan they develop or refer you to others who will do so. If you’re keen to deal with a firm which puts real Financial Planning service at the heart of its service to clients, check out our register of Financial Planners.

  Will you be the only person working with me?

It is quite common for a financial planner to work with their team to provide the full Financial Planning service to you. You may want to meet everyone who will be working with you and this will often involve Paraplanners. These are professionals who work to support the Financial Planner, providing technical research and backup as well as report writing and analysis. CISI Accredited Financial Planning Firms have passed rigorous assessment that they adhere to the highest standards of ethical and professional service to clients. Looking for this mark of quality means you can have confidence that the approach of the whole organisation is focused on putting your needs first.

  How will I pay for your services?

There is not, and never has been, such a thing as free financial advice. Your planner should disclose the cost of their services in writing in advance of them starting to work with you, so you are clear on this as well as how they will charge you for the services they will provide.

  How much do you typically charge?

Although the amount you pay the planner depends on your particular needs, even at an early stage in the process the financial planner should be able to provide you with an estimate of costs based on the work they will be carrying out for you.

  How are you regulated?

Financial planners who sell financial products such as investments must be regulated by the FCA. Since January 2013 all retail investment advisers must have a Statement of Professional Standing (SPS) from an FCA accredited body such as CISI. You could ask to see it and check that it is not out of date. You can use this link to check that both the firm and the individual adviser or planner are authorised by the FCA. You should also ask whether the advice they give when it comes to recommending financial products is independent or restricted. Independent advisers have a duty to research products across the whole of the market. It’s also a fair question to ask if they have ever been the subject of disciplinary action by any regulatory body or professional association.

  How often do you review my situation?

Good financial planners will make sure that they review your situation at least annually. Many will do so more frequently, but a thorough review once a year is sufficient to ensure that your plan keeps up to date with your changing circumstances.

  Can I have it in writing?

And finally, be sure to ask the planner to provide you with a written agreement that details the services that will be provided.

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