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There is a general acceptance that we are all better informed now we have the Internet, which can provide information on virtually any topic with a few clicks of a mouse. But when does information, guidance or opinion stray into formal advice and recommendation?
Take restaurants for example. Say you’re heading away for a weekend break and while you’re away you want to enjoy a nice meal at a good restaurant, but how do you decide which one and where do you go for ‘advice’?
There is usually a vast array of restaurants with different cuisines so where do you start? Many people go online, browse the menu and make a decision from there, but the options can be bewildering. Perhaps cost is a consideration. Or the wine list. And what did other people think when they dined there?
Other people’s views can often greatly influence our choices, but is a review on Trip Advisor truly objective or just an opinion? And if you follow their recommendations and the meal isn’t up to scratch do you just put it down to experience? Fundamentally, these ‘recommendations’ are just opinions and experiences, rarely, if ever, provided by connoisseurs of fine dining with the credentials to support their views.
So when it comes to considerably more important matters, such as your finances, where do you turn? Do you have an expert who deals with matters for you; or do you perform research yourself, or rely on the opinion of friends and acquaintances?
Recent research by Aegon UK reveals that three quarters of consumers feel that there should be clearer communication about the types of financial planning services available, but 27% of those surveyed regarded a recommendation from a friend as financial advice, 26% viewed online forums as advice and 22% relied on ‘advice’ from their newspaper.
There is no right or wrong answer here of course, but making the wrong decision can be very costly. As the saying goes, ‘you pays your money you takes your choice’, but the one thing missing from all of these ‘advice’ mediums is the fact that advice is regulated and paid for. Guidance and information are not.
Guidance and information provided by friends, newspapers, the Internet and other media are all usually free, but do any of them have the relevant credentials, and more importantly, do they point out all the potential pitfalls?
Following the introduction of the new pension freedoms, we’re already seeing instances where individuals are sleepwalking into substantial tax bills, all because they didn’t seek professional advice and weren’t aware of the downsides to their actions, and with the number of pension scams in operation on the increase, some people are in real danger of being duped out of their pension savings by unauthorised, unregulated ‘advisers’.
Many of these scams appear credible and what you see may not be all it appears to be, but help is out there. If you are over the age of 50 and are looking for assistance with your retirement options, you can obtain free and impartial guidance from Pension Wise, which is a Government service set up for consumers.
This isn’t all about pensions though and for many people guidance and information aren’t enough for them to be able to reach a fully informed decision about their financial affairs, so they seek professional advice.
Financial advice is highly regulated and all advisers are required to be appropriately qualified and authorised by the Financial Conduct Authority (FCA). The Financial Services Register on the FCA website confirms that the firm and the adviser you are dealing with are authorised.
A regulated adviser can tailor their advice and solutions specifically to you. If you haven’t got a plan, they can help you create one that is focussed on prioritising and achieving your goals and aspirations. Importantly, if you seek regulated advice you’re afforded substantial consumer protections, which you’ll not receive in most DIY circumstances.
This doesn’t mean that you can’t do it yourself if you’ve got all the facts, but if you haven’t and you make a mistake, fixing it could end up costing more than if you’d paid for the advice first time round.
If you need impartial, professional advice, contact one of our fully qualified Financial Planning Consultants at an office that’s local to you.
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Armstrong Watson Financial Planning Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 542122. Registered as a limited company in England and Wales No. 7208672. Armstrong Watson Financial Planning & Wealth Management is a trading name of Armstrong Watson Financial Planning Limited. Registered Office: 15 Victoria Place, Carlisle, CA1 1EW