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What Does a Financial Planner Do? 5 Different Ways They Can Help You

By RWB Wealth27 September 2024
What Does a Financial Planner Do? 5 Different Ways They Can Help You

Managing your finances effectively can be challenging, especially when juggling savings, investments, taxes, retirement planning, and alongside life. That’s where a financial planner comes in. A financial planner can help you navigate your financial journey, offering expert advice and tailored strategies to meet your goals, whether it's saving for a house, planning for retirement, or maximising your investments.

In this article, we’ll explore what a financial planner does and highlight five different ways they can help you make the most of your financial situation.

What Does a Financial Planner Do? 5 Different Ways They Can Help You


1. They Help You Create a Comprehensive Financial Plan

One of the key services a financial planner provides is helping you create a comprehensive financial plan that aligns with your personal goals and current financial situation. Whether you’re planning for a big purchase like a home, building a retirement fund, or simply wanting to save more effectively, they can assess your income, expenses, assets, and debts to create a personalised plan.

Your financial plan may include:

Setting short-term and long-term goals

Creating a realistic budget

Managing your savings and investments

Planning for major life events, such as starting a family or retirement

Things to Keep in Mind
Working with a financial planner can provide clarity on how to achieve your financial objectives. Regular reviews with your planner will help you adjust your plan as your circumstances or goals change over time.

2. They Provide Expert Investment Advice

Investment can be a key part of growing your wealth, but knowing where, when, and how to invest can be complex and risky. A financial planner helps you create an investment strategy that matches your risk tolerance, time horizon, and financial goals.

Financial planners can:

Help you choose appropriate investment types, such as stocks, bonds, or other alternate investments.

Diversify your portfolio to manage risk

Monitor market conditions and adjust your investment strategy as needed

By tailoring your investments to your specific situation, a financial planner can help maximise returns while managing risk, ensuring that your portfolio aligns with your financial goals.

Things to Keep in Mind
If you’re new to investing or feel unsure about managing your investments, a financial planner can provide expert guidance, giving you peace of mind that your money is working for you.

3. They Help You Plan for Retirement

Planning for a comfortable retirement requires careful preparation, especially with factors like rising living costs and increasing life expectancy. A financial planner can help you map out how much you need to save and how to structure your retirement income to meet your future needs.

A financial planner can:

Estimate your retirement income needs based on your lifestyle goals

Help you choose the right pension plan, whether it’s a workplace pension or a private pension

Maximise your pension contributions and take advantage of any available tax relief

Create a drawdown strategy for when you retire, ensuring your savings last throughout retirement

Things to Keep in Mind
The sooner you start planning for retirement, the better. A financial planner can help you set realistic goals and take the necessary steps to ensure that you have enough income to live comfortably once you stop working.

4. They Offer Tax Planning Strategies

Taxes can have a significant impact on your income, investments, and savings, but a financial planner can help you minimise your tax liability through effective tax planning strategies. They can ensure you’re taking full advantage of tax reliefs, allowances, and exemptions, making sure that more of your money stays in your pocket.

A financial planner can assist with:

Structuring your investments in tax-efficient accounts, such as ISAs or pensions

Utilising annual tax-free allowances to minimise Capital Gains Tax (CGT)

Managing inheritance tax (IHT) planning, ensuring your assets are passed on to your loved ones efficiently

Helping business owners optimise their tax situation through allowances and reliefs

Things to Keep in Mind
Tax planning can be complex, and the rules often change. A financial planner can help you stay up to date with tax laws and ensure your finances are structured in the most tax-efficient way possible.

5. They Assist with Estate Planning

A financial planner can also assist with estate planning, ensuring that your assets are distributed according to your wishes after you pass away. Estate planning goes beyond writing a will – it involves strategies to minimise inheritance tax, set up trusts, and ensure that your family is financially secure.

A financial planner can help with:

Setting up trusts to protect assets for your beneficiaries

Reducing your inheritance tax liability

Ensuring that your estate is distributed according to your wishes

By working with a financial planner, you can help ensure that your legacy is protected and that your loved ones are taken care of after you’re gone.

Things to Keep in Mind
If you haven’t thought about estate planning, now is the time to start. A financial planner can guide you through the process and ensure that your estate is handled efficiently and tax-effectively.

The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefor go down as well as up. You may get less than you invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief is generally dependent on individual circumstances.

Will writing involves the referral to a service that is separate and distinct to those offered by St. James's Place and along with Trusts are not regulated by the Financial Conduct Authority.

Final Thoughts

A financial planner can play a vital role in helping you manage your money more effectively and reach your long-term financial goals. From crafting a detailed financial plan and offering expert investment advice to retirement and tax planning, they provide valuable insights and strategies tailored to your needs. Whether you’re just starting out or looking to fine-tune your finances, working with a financial planner can provide the guidance and peace of mind you need to make the most of your money.

FAQs

How much does a financial planner charge?

Financial planners charge in various ways, including a flat fee, hourly rate, or a percentage of the assets they manage. Fees vary depending on the services provided and the complexity of your financial situation. It’s important to discuss fees upfront so that you understand the cost structure before you begin working with a planner.

What qualifications should a financial planner have in the UK?

In the UK, financial planners must hold qualifications such as the Diploma in Financial Planning (DipPFS) or Certified Financial Planner (CFP). They should also be authorised by the Financial Conduct Authority (FCA), ensuring that they meet industry standards and provide regulated advice.

Can a financial planner help with debt management?

Yes, financial planners can offer advice on managing and reducing debt. They can help you prioritise repayments, create a budget, and find strategies to pay off debts efficiently, such as consolidating high-interest loans or negotiating with creditors.

Do I need a financial planner if I’m already investing?

Even if you’re already investing, a financial planner can provide additional value by reviewing your portfolio, suggesting improvements, and helping you stay on track with your goals. They can also offer insight into tax strategies, retirement planning, and estate planning to ensure your broader financial picture is in order.

What is the difference between a financial planner and a financial adviser?

The terms "financial planner" and "financial adviser" are often used interchangeably, but a financial planner typically focuses on creating a holistic plan covering all aspects of your financial life, including retirement, taxes, and estate planning. A financial planner, on the other hand, may focus more on specific areas like investments or insurance.

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