June 23, 2024
How do you decide how much to tell your accountant, or your solicitor? The chances are, you are aware of the need to be honest about your finances, or any legal situation – both to stay on the right side of the law, and to ensure these professionals have all the information they need to get the best outcome for you.
But what about your financial adviser? How much do you need to tell them about your personal circumstances? And crucially, how comfortable do you feel with sharing (perhaps intimate) details of your health, your family relationships, and your aspirations for the future?
Most of our clients at Talis IFA have been with us for several years (decades, in some cases). The reasons for that are simple – we’ve helped them to achieve or exceed their financial objectives, and we’ve built a great relationship based on trust and honesty. That gives our clients confidence in our expertise as well as enabling them to feel comfortable sharing details of their personal lives with us.
As James Cole, our MD, says, “People often come to us first for something like a mortgage. That involves sharing some information – income and outgoings, for instance. But as we get more involved, in order for us to develop an effective financial plan, we need to know more to recommend the most appropriate solutions. Effective pension planning requires knowledge of what you want your life to look like after retirement, while helping you to mitigate inheritance tax involves knowing what you want to happen before and after your death – who you want to benefit from your assets, how and when. That can start to feel really personal, but the more we know, the better placed we are to guide you towards decisions, so it’s important that you feel comfortable sharing those details with your IFA.”
It pays to be honest with your IFA
There are important practical reasons for full disclosure. When it comes to financial protection, like life insurance or income protection, complete honesty is vital. When you look at insurers’ records of paying claims, most pay around 90%-95% of claims. The main reason for not paying a claim is non-disclosure of material facts at the time of application. Material facts include lifestyle factors (whether you smoke, for example) and existing health issues, so you need to declare these on any application.
Telling your IFA beforehand can save wasting time, and potentially your money, on options which aren’t appropriate for you.
Disclosing health issues can benefit you in other ways. Here, Talis IFA Nicolle Sodey talks about how her knowledge of a client’s health issues enabled her to secure a 55% uplift in lifetime annuity income – because the insurer had the full picture.
The truth doesn’t have to hurt
Sometimes, we worry about sharing certain details of our personal lives, or aspirations, because we’re worried about how that will make us look, or because we find it upsetting. It’s quite common for people to feel awkward talking about their financial aspirations, or what they want to happen to their estate after they die.
Remember that (just like a lawyer or accountant) an IFA isn’t there to judge you. We need to know the facts so that we can guide you towards the most suitable outcomes for your circumstances – based on where you are now, and where you want to get to in the future. Telling us what YOU really want to achieve gives us the information we need to weed out what isn’t right for you and base our recommendations on solutions which could be. What your friend/family member/colleague has done won’t necessarily work for you – that’s why we make recommendations based on desired outcomes, rather than particular products.
But IFAs are human too…
There’s little in life more frustrating than getting towards the end of a piece of work, and then finding out that you only had some of the necessary information (or finishing a 2000-piece jigsaw puzzle apart from one missing piece…).
We don‘t judge anyone for their choices or circumstances, but what IS frustrating is discovering some essential information part of the way through the process of working out your roadmap to financial freedom. Sharing all the relevant facts with your IFA at the outset can avoid lots of to-ing and fro-ing, save you the irritation of having applications turned down for unforeseen reasons, and potentially even save you money in fees.
How do you find an IFA you can talk to?
Many people find an IFA through a personal referral. So you could start by asking a friend or family member who they would recommend, or use a service like VouchedFor, which includes reviews from real clients.
If you’re searching online, you’ll come up with countless options, so how do you narrow them down? Here are a few things to look for:
Look for an independent financial adviser. An IFA will act only on your behalf, and has access to the whole market when it comes to recommending solutions. If a financial adviser isn’t independent, they must recommend particular products from a restricted range.
All financial advisers – independent or not – must be regulated by the Financial Conduct Authority, and you can check this by searching for them on the FCA register.
Your IFA needs to be qualified to a minimum standard, and some will have gained additional qualifications. These might relate to specific topics like Equity Release and Long Term Care. They must also hold a current Statement of Professional Standing (SPS) which is renewed annually.
Perhaps you are looking for specific advice, but most financial advisers should cover the basics including:
If you are a business owner, you might also want to look for an IFA with experience in dealing with employee benefits and corporation tax, for example.
Once you’ve narrowed down your search, before committing to anything, arrange a short meeting to get to know your potential IFA, and see how comfortable you feel talking to them.
Your first meeting is a chance to assess whether they seem competent and professional, but more importantly whether you feel comfortable sharing information with them.
If this has inspired you to start the search for an IFA you can talk to, find a Talis IFA here. We provide unbiased, objective advice in plain English, to help set you on the path to financial freedom.
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