Do I need financial advice?

As part of our Destination Retirement service you can access financial advice whenever you need it. But how do you know if you need it?

What exactly is financial advice?

Financial advice isn't just a casual chat about money. It's a professional service, regulated by UK financial laws, that provides you with personalised recommendations. 

Your recommendations will be tailored to your:

• unique financial situation
• goals
• attitude towards investment risk.

They could cover a range of topics like: 

• budgeting and lifestyle
• investing
• retirement planning
• tax planning.

Rules and regulations

The Financial Conduct Authority (FCA) sets out the rules that advice firms and services must follow. Advisers are allowed to carry out regulated activities, such as advising on investments. And if something goes wrong, you can complain to the Financial Ombudsman Service.

Our Destination Retirement service follows the FCA regulations.

Terminology alert – guidance vs advice

• Guidance covers general information that may or may not apply to you. You can find guidance from a service like MoneyHelper, for example.
• Advice includes recommendations tailored just for you and your situation. 

Why would I want financial advice?

There are some key moments in retirement planning when it could be a good idea to get financial advice:

• Setting up your long-term savings and investments
• Reacting to major life changes such as marriage, divorce, having children, receiving a windfall or changing career
• Switching from saving to spending your retirement money

Savings can be straightforward

For some decisions, such as choosing funds for your investments, you may feel confident to gather information to make an informed decision. Or you may want some advice to get you started.

Destination Retirement offers Individual Savings Accounts (ISAs), Self Invested Personal Pensions (SIPPs) and General Investment accounts (GIAs). All of these financial products invest in a choice of portfolios with different risk levels. It’s a streamlined approach and easy to set up without advice for those who feel confident. 

Important: Any money invested in a pension, stocks & shares ISA or GIA could rise and fall in value. Returns are not guaranteed – you may get back less than you put in.

Retirement income – help required

Turning your savings into an income involves some of the most complex financial decisions you’ll ever have to make. We think everyone could benefit from financial advice for key decisions about switching from saving to spending. 

Some decisions about retirement income are non-reversible. If you’re buying an annuity to pay you an income for the rest of your life, you’ll want to feel you’re definitely getting it right. And if you’re drawing down your pension, you may want advice more often to ensure you keep getting it right.

You may feel happy to save quietly for retirement, unsupervised, for years. Our service can be ideal for this, as you can keep going back to our Retirement Planner to see if you’re on track.

But when it comes to switching to retirement income, we’d encourage you to book an appointment. Our Retirement Specialists can discuss your options, answer your questions and help you refine your plan. You may want to use our Retirement Income Advice service, which can give you personalised recommendations.

Is this a regular thing?

Financial advice can be a one-off event, or a regular occurrence. Many financial advisers expect you to sign up for regular reviews. 

Our service allows you to access financial advice in a way that suits you. You may need regular advice about your retirement income. Or you may want a one-off advice session to sort out your pension and investments while you're still saving. The rest of the time you may be happy to make up your own mind without advice. You can use our Retirement Planner tool and have a chat with our Savings and Retirement Specialists any time.

Can I afford it?

As with any professional service, financial advice comes at a price. 

Advisers may charge: 

• up-front fees for their time
• a percentage of the value of your investments.

According to Which?, most advice firms don’t mention fees up front on their website, which might be one reason many people assume they’re pricy. In a 2023 study by the Financial Services Compensation Scheme (FSCS) 22% of people said they didn’t want to ask for financial advice because it was too expensive. 

A study by the International Longevity Centre showed that even those ‘just getting by’ can benefit from financial advice. This group saw their pension boosted by 24% over a decade with professional advice. The ‘affluent’ group got an 11% boost.

Regular advice can be costly. However, Destination Retirement’s fees are percentage based, so if you have less money, you pay less. And there’s no upfront fee to receive savings or retirement income advice. 

Do I have enough money?

Almost 60% of advice firms have set minimum asset limits for their clients, so this can be a barrier to receiving financial advice. Advisers are right to make sure they’re adding value to their clients’ financial planning. Make sure the cost of the advice doesn’t outweigh the benefits, keeping in mind the amount of money you have. 

With a flexible approach to guidance and advice, along with innovative use of technology, Destination Retirement has a low limit. You only need £10,000 in assets at the point you retire to be a customer.

Other source material used in the writing of this article:

Is paying for financial advice worth it? - Times Money Mentor

PERG 8.28 Advice or information - FCA Handbook

Getting financial advice - Royal London

Want one-off financial advice? Here's what to ask for and the costs involved | This is Money