The true value of financial planning

A planner will also help see you through significant life events or personal changes, such as bereavement, divorce, or retirement. It really is an all-encompassing, very personal service.

It’s entirely natural that you’d expect value from the money you invest in financial planning, as you would from your accountant, solicitor, or lawyer.

But what do we mean by “value”, and how do we measure it when the results you might seek are often years away? Continue reading to find out.

It’s often easy to think of financial planning as something you’ll only need at certain points in your life, such as when you’re approaching retirement, if you come into money, or you’re thinking about passing on wealth.

Sometimes, the value you receive from a planner is tangible. For instance, the money you save by investing tax-efficiently, or the return you get on a diversified portfolio compared to savings.

But many of the other, perhaps most valuable, aspects of financial planning are often broader and harder to quantify.

Over time, a good financial planner essentially becomes your trusted confidant. They see the person behind the wealth. They’re there to guide you through complex and potentially stressful situations, such as estate planning, bereavement, divorce, or even health challenges.

The highly personal and emotional topics you discuss with your planner – which you might not be entirely comfortable talking about with your loved ones – can add to your peace of mind.

You will likely only experience certain significant life moments – such as retirement, selling your business, or passing on wealth – once.

Yet, financial planners are no strangers to these events, having dealt with them many times with other clients.

This experience means they can guide you through this unfamiliar territory with empathy and insight. They’ll know exactly what questions to ask, the pitfalls to avoid, and how they can help you make the most of any opportunities. But that doesn’t mean to say they’ll put you in a box. They’ll have dealt with the life event before, but your circumstances, beliefs, and attitudes to money and risk will require a bespoke plan.

There’s great value in this collective wisdom from your financial planner and their team, from their expertise in complex financial matters to their experience over the years.

Sometimes, however, the greatest value lies in the things you don’t do, and this can be difficult to measure.

Sound financial planning might help you and your family avoid investments that don’t suit your appetite for risk or capacity for loss. Without financial planning, you might end up paying unnecessary tax or even create avoidable disputes when it comes to estate planning.

Ultimately, financial planning is about helping you live the life you want to live with confidence and clarity, all without the stress of wondering whether you’ve missed something important.

While the intangible aspects of planning are significant, there is also evidence that shows how working with a financial planner can add value.

Though the specific results vary, they are all clear that financial planning has the potential to offer considerable returns over time.

For instance, a 2019 report by Russell Investments revealed that by advising beyond just investments – on matters such as tax and estate planning – financial planners can add at least 4.4% more value to clients every year.

Unbiased reported a study showing that individuals who used a financial planner were, on average, nearly £48,000 better off in pensions and financial assets over a decade compared to those who did not.
This research suggests that taking advice does pay off, especially over the long term.

As you can see, financial planning isn’t just about investments or retirement funds – it’s about achieving the freedom to live the life you want.

While there’s significant evidence to suggest that working with an independent financial planner like those at Amber River can deliver long-term value, its real worth often lies in the intangible.

Indeed, they could offer you some much-needed peace of mind, confidence, clarity, and the reassurance knowing that someone is looking out for you.