The Benefits of Hiring a Financial Advisor

According to Statista, the total number of regulated financial advisors in the UK decreased from 5,746 in 2016 to just 5,543 last year.

This was mainly due to a decrease in the number of restricted traders, alongside a volatile and challenging economic climate where households typically had less capital to save or invest freely.

Given the uncertainty that continues to hang over the global economy and the lingering spectre of the coronavirus, however, there are numerous benefits to hiring a financial advisor if you want to make your capital work for you in 2021 and beyond. These include:

#1. Affords You Peace of Mind in Your Long-term Financial Situation

While Covid-19 and its associated lockdowns may have accelerated the economic uncertainty across the globe, there’s no doubt that the world has continued to encounter sluggish growth since the great recession 13 years ago.

This has been largely defined by rising inflation and stagnant wage growth, with the former projected to reach 4.4% during Q2 of next year.

Because of this, the current global uncertainty is likely to remain unchecked for the foreseeable future, creating widespread financial uncertainty and encouraging some to seek out advice on how to secure their financial futures.

In particular, this can help you to optimise your savings and potentially increase income over time, while also encouraging you to live more frugally in the medium and longer-term.

#2. Create a Balanced Investment Portfolio

When committing a percentage of your disposable income each month, it’s also important that you invest this wisely and take practical steps to optimise future returns.

The most important step is to create the right combination of assets, with a particular focus on stocks and fixed income products such as bonds. Interestingly, the recommended balance of assets will change depending on your age, while your underlying risk profile and capital holdings will also have an indirect impact.

For younger investors who are of working age, the simplest rule suggests a 60/40 when it comes to asset allocation. More specifically, you’ll invest 60% of your capital in higher risk and more rewarding assets such as stocks, with the remaining 40% committed to government bonds.

This way, you can combine a steady and incremental return with disproportionately high gains, while creating a safety net in the event that your riskier investments trigger short-term losses.

#3. Create a Structured Plan for Your Financial Objective and Retirement

Depending on your age, you’re also likely to have a diverse range of financial goals and objectives that you’d like to plan for.

Regardless, a sustained period of expert financial planning can create bespoke advice and measures to help you achieve these goals, while also recommending investment portfolios that can be adjusted and evolved over time.

In the longer-term, financial advisers can also help you to plan for your retirement, allowing you to create enough cash for life out of the workforce and negate the need to rely on a dwindling state pension.