Unfortunately, many people fail to review their investments, savings, and insurance policies as one package, instead of reviewing them in isolation. It is very important to review all of your assets, investments, and savings together on a regular basis.
This is where a competent financial adviser can be worth their weight in gold.
In recent times many people have been looking to make their own pension arrangements for the future. Concerns that the state pension could be means-tested, or simply unable to provide a particular standard of living going forward, appear to be major worries.
As a consequence, it is extremely important that you review your pension fund investments together with all of your other finances.
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If you take a step back and look at the situation from a distance, the majority of your financial instruments will be connected by the source of funds. For the vast majority of people, the source of funds available for pensions, etc. will come from their employment. So, with limited funds to go around, it is essential to look at all areas of your financial scenario together as opposed to in isolation. For example:-
Let us assume that you received a large salary increase at work. If you are looking at your pension fund contributions, you may be tempted to increase these. However, if you were to look at your personal loan/credit card debt, predominantly high-interest debt, you might think differently.
Then again, if you were to look at your outstanding mortgage in isolation, you may be attempted to pay down some capital. However, if you look at all of your finances together, this will give you a broader picture and allow you to make the “right” decision.
As stock market investments, as one example, are generally reviewed on an annual basis, then it makes sense to review all of your assets on an annual basis. This frequency of review should not be set in stone.
For example, if there was a significant change in your life or a significant movement in markets, it might be sensible to undertake an additional review. Sometimes time can be of the essence when it comes to finances!
Yes, for the vast majority of people. The likelihood is that you will have paid down a significant portion of your mortgage, resulting in a high level of equity. It may be sensible to release some of this equity to pay down relatively expensive debt, such as a personal loan/credit card. Then we move on to your pension fund.
There is no hard and fast rule with regards to pension fund investments, with numerous options under the current regulations. What we do know is that you can start to withdraw funds from your pension when you hit 55.
We also know that many people will look towards safer/income-producing assets as they move into retirement. This will give a degree of backbone to their long-term income and reduce the volatility of other investment classes, which may have been more appropriate in years gone by.
As we could be looking at significant levels of debt, investment, and pension fund assets, a trusted financial adviser could prove extremely valuable. We often use the old adage; if you had no experience in repairing vehicles, then surely you wouldn’t do your own MOT?
The same is true of financial affairs. Unless you have a level of experience, it can all become very complicated, and mistakes can be made - mistakes which could prove extremely costly!
The vast majority of financial advisers will have experience across the board. The larger companies tend to have different departments for different types of investments, such as insurance policies, pensions, etc. So the likelihood is that the majority of your financial requirements could be met by one company.
The benefit here is that they all work from the same information and, assuming you do have regular financial reviews, this information should always be up to date.
Many people fail to note the potentially huge benefits of regular financial reviews. Going through your finances in great detail might expose incorrect advice in years gone by. This could be something such as a mis-sold pension or unfulfilled promises that funds would be available to pay off your mortgage.
You may be able to limit the long-term damage if issues are spotted early enough - although still able to pursue a complaint for incorrect/inappropriate advice.
It is very important that your financial adviser is regulated in order to maximize your protection. In the event of a mis-sold pension, you have the option of approaching the Financial Ombudsman Service or the Pensions Ombudsman.
The Financial Ombudsman Service is the more powerful of the two bodies, able to investigate any financial complaints. The Pensions Ombudsman is focused more upon pension schemes, including employment and personal schemes. These are very powerful bodies and because of the way that the UK financial sector is regulated, what they say tends to go.
So, if you do have a complaint about pension mis-selling/inappropriate advice, then you have two options.
Just as the vast majority of people use financial advisers in areas where they have limited experience, the same could be said of complaints procedures. The formal process of complaining to the Financial Ombudsman Service or Pensions Ombudsman is straightforward.
It becomes a little more complicated when you consider the evidence required to pursue your claim. This is where claims management companies can prove to be extremely helpful.
Complaints regarding financial advice have grown in number in recent years. Therefore the majority of claims management companies will have a degree of experience in this area.
It is extremely dangerous to review different areas of your finances in isolation, as opposed to taking in the wider picture. As we touched on above, there are numerous problems that could occur with this strategy. Broader reviews can identify potential problems with pension advice, often received many years ago.
While there is a limited six-year window of opportunity to pursue compensation for mis-sold pensions, this timescale is sometimes flexible. For example, if you were only made aware of the issue 10 years after the advice was given, it seems unfair.
Thankfully, there is also a three-year window of opportunity to pursue compensation, which starts on the date you found out you had received inappropriate advice—already complicated!
Here at Money Savings Advice, we have partnered with some of the UK’s leading Financial Claims management companies. They have already helped thousands of people claim compensation for a mis-sold pension and they can do the same for you.
Choosing an independent claims management company means they won’t proceed with a claim unless they are sure it is in your best interests. They are also regulated by the FCA, which gives you an additional layer of protection.
If you would like to speak to one of these claim management companies who can help you make a compensation claim, then click on the below and answer the very simple questions.
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