Looking for financial expertise and unsure of who to approach? Every year in the UK, the number of people using financial professionals grows. Understanding which type of professional to approach is central to meeting your financial goals and securing your future. In this guide, we consider different types of financial professionals and the unique services they provide.
You may be wondering what the difference is between a financial adviser and a financial consultant. Each profession overlaps with the other in terms of knowledge and expertise, and personnel will usually bring similar qualifications. Both professions aim to build relationships with clients and help them make better financial decisions. The key difference, though, lies in the scope of services offered and the longevity of the relationship.
Financial advisers
A financial adviser is usually defined as a professional who helps clients manage their assets, liabilities and future decision making. They are there to simplify complex options and help you make more informed decisions. Professional financial advisers offer full financial planning services and ongoing portfolio management to help clients realise their financial ambitions. Figures published by the Financial Conduct Authority (FCA) show that the average UK investor reliant on a financial adviser now has more than £150,000 in their portfolio.
They can offer guidance on what to do with your money whilst suggesting smart investment strategies. They can guide you through major life-changing events such as buying a home or entering retirement. Areas of expertise might include budgets, debt, insurance, taxation, property, retirement and estate planning. When a financial adviser has identified a suitable strategy, they will craft a personalised financial plan carefully designed to meet your needs.
Financial advisers can charge clients in different ways. Some will demand a fee or ask for a percentage, commonly referred to as assets under management (AUM). Others may ask for a combination of both. Fee-based charges might include a flat fee, hourly rate or a retainer, whereas an AUM means the client pays a percentage of the overall value of the investments managed for them. The payment system used will depend on the type of service offered. A basic financial advice package might involve a flat fee or hourly rate. This will be higher for more specialist services like retirement or estate planning, and for city-based services due to higher costs. With AUMs, an adviser will often offer a tiered service so the percentage they take decreases as your assets grow.
Financial advisers are strictly regulated by the FCA. This body oversees standards, protects consumers and tries to ensure the industry operates on a competitive and level playing field.
Financial consultants
Financial consultants are sometimes also known as financial planners or financial analysts. They tend to focus on very specific aspects of finance. They offer expertise and strategic approaches in areas such as tax planning, retirement planning, risk management, and investment management. Clients include individuals and corporations alike.
Financial consultants in the UK are slightly different to other countries. A financial planner overseas is more strictly regulated in their capacity as someone who specialises in planning, whereas in Britain, they just need to be able to deliver accredited financial services. Their primary goal is to maximise their client’s financial health by providing clear roadmaps for the journey ahead. This can be achieved in numerous ways, by evaluating investment opportunities and identifying market trends. Financial consultants will offer advice on reducing your tax liability or on how to create a customised retirement plan. They might also collaborate with business customers on streamlining operations, or offering pointers on making them more efficient or financially effective.
Financial consultants will either charge a daily or hourly rate, or a project-based fee. Others may work on a retainer basis. This is when clients pay a fixed fee for services which are ongoing. When financial consultants offer investment advice or portfolio management services, they might opt to charge an AUM percentage. As with financial advisers, financial consultants in the UK are regulated by the FCA.
Hiring the right financial professional is an important way of managing your financial health and boosting your money stream in the longer term. If you are currently looking for a financial adviser or financial consultant in Cheshire or Oswestry, call our team at Hartey Wealth Management now to make an appointment.
