10 popular questions for Financial Advisers
I’ve had a think and come up with some of the most common questions I come across and answered them.
Can you think of any more that I haven’t covered here?
Q: “Am I saving enough for retirement?”
This is one of the biggest questions I hear.
We provide illustrations which will project what you MAY have at retirement, based on certain assumptions including how much you are intending to put by, the amount of time you’re intending to invest for, growth levels and the kind of investment you’re
making. These illustrations can’t accommodate any changes or fluctuations: they’re really a snapshot.
We can also look at cashflow modelling which is a more dynamic method of looking at what’s going on. We can use “what if” scenarios which, for example, may include paying off your mortgage early, receiving a windfall and unexpected expenditure.
Of course, we’ll need to know what your anticipated expenditure will be in your retirement so it’s important you have a think about that and not underestimate what your needs will be later in life.
Q: “How can I reduce my tax bill?”
This is a common question and is not just for self-employed people. The obvious savings might be reducing corporation tax by making company contributions to your pension scheme, or reducing your personal tax liability (and getting tax relief) by means of personal pension contributions.
However, we need to consider whether you will be leaving an inheritance tax liability on your death. Taking a holistic view of your circumstances which includes assets, cash and investments you hold ANYWHERE and whether there are any ways we could help you mitigate any future inheritance liability for your beneficiaries.
Q: “How should I invest my money?”
I feel it’s really important that your money works as hard for you as you do.
Whether you keep your money in cash, assets such as property or invest it, is really down to your own preferences and your risk profile.
Although interest rates are slightly higher now than they were a few years ago, keeping your money as cash or in a fixed interest account, MAY not keep up with inflation which means your money may be worth less in the future than it is worth now.
How quickly can you access any assets you hold? Property may not be sold and turned into cash very quickly, but if you won’t need the cash quickly, that may not be a problem.
Are there any limitations in terms of when you can access funds based on your age or circumstances? For example, currently you can’t access any of your pension funds until you’re 55 and this is going to increase to 57 in 2028.
Will there be any penalties for accessing the funds earlier than expected? Taking out a Lifetime ISA will give you a government bonus for saving, however if you need to withdraw any of your savings for a reason other than buying a property, you will be subject to a penalty of 25% of the withdrawal which may work out to be more than the government bonus – so your own savings have been penalised.
Q: “Should I pay off my mortgage or invest?”
This is a really interesting question because your mortgage is likely to be the biggest debt you’ll ever have. And your monthly mortgage payment is probably your largest monthly outgoing.
Again, the answer to this is likely to be based on your willingness to take risk.
Paying off your mortgage in full will reduce your outgoings and therefore increase your monthly disposable income.
The money you save by not having a mortgage to pay each month could be invested for your future.
However, there is always a train of thought that asks you to consider the interest rate you’re paying on your mortgage and whether you feel you could achieve a higher rate of return by investing the money, instead of paying off your mortgage.
A general rule of thumb: paying off debt GUARANTEES you reduce your outgoings (assuming you don’t replace that with other debt). When you invest, there is NO GUARANTEE on the level of return and you MAY get less than you invested.
Q: “What happens if I get ill or can’t work?”
In my experience, the reality of getting ill or not being able to work, only hits when it happens. And it’s then too late to implement tools to mitigate the effects and provide you with protection to cover you in these circumstances.
The reality is we’re ALL going to die at some point. Around one in 2 of us might, at some
point in our life, have a diagnosis of cancer*.
The risk is there.
Ignoring it will not make it go away.
Addressing the risk and putting protection in place before it’s too late will hopefully prevent your future plans being hijacked by an unfortunate and unforeseen circumstance.
What effect will your loss of income or even death, have on your family?
After all: we all have house and car insurance because it’s mandatory. Not because we
WANT to have an accident or incident. The insurance gives us the peace of mind of
knowing we are protected if the worst happens.
*Cancer Research UK: https://www.cancerresearchuk.org/health-professional/cancerstatistics/risk Accessed May, 2025.
Q: “What should I do with an inheritance?”
When you receive an unexpected inheritance or lump sum, gives you options you wouldn’t necessarily have had before.
You want to make sure you use it wisely and make it work hard for you.
Again, we can use cashflow modelling to visualise the effect this could have on your finances now and in the future. Reducing debt will increase your disposable income and usually it reduces the amount of interest you’ll pay over the longer term.
Q: “Can I afford private school/university fees for my children?”
If education costs are important to you, it’s vital you start thinking about them as early as you possibly can. Starting to put something aside from the time your children are born can make a huge difference. Having to find the money at the point they start university (or school) will be more of an upheaval than if you’ve made regular contributions towards the cost from an early start.
Q: “What’s the best way to pass money on to my children?”
It’s important that you have a plan and you know what you want to pass on to your children and when.
Regular gifting (without any tax liability) is an option if you’re happy to gift small amounts regularly, but we can also look at other available tools to minimise any future tax liability.
Q: “Am I financially on track?”
This is a very common question and the answer needs you to be aware of what your future requirements are. How much will you need in retirement? How old will you be when you retire? What other income streams do you have and when will they be available to you? Do you have a plan and if not, is it time to start thinking about implementing a plan to help you reach financial goals?
Q: “Do I need a financial planner?”
This is an interesting question and the answer may be different depending on your experience, your goals, plans and current situation.
A Financial Adviser/Financial Planner can help you formulate your goals and offer regular reviews to ensure your plans are still appropriate for your circumstances. Your circumstances change and your goals may change with them.
You could probably cut your own hair. But would you want to? And would the result be exactly what you anticipated it would be?
The answer is down to you.
Most Financial Advisers will offer an initial consultation with no obligation or commitment. Why not take advantage of that and then see where that leads you?
I’d love to have a chat so we can discuss any or all of the above questions in more detail.
Your home may be repossessed if you do not keep up the repayments your mortgage.
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 therefore go down as well as up. You may get back less than you invested. Equities do not provide the security of capital which is characteristic of a deposit with a bank or building society.
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.
Savings accounts and Lifetime ISAs are not available through St. James Place It is also not possible to invest directly in property through SJP.
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Although the content of the article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.
