Three situations when a financial adviser may refer you to a different profession

Your relationship with a Flying Colours financial adviser covers several important areas of your wealth. You can think of your financial plan as the big picture, encompassing lots of smaller details.

We can help you with many of those details, such as how much you contribute to your pension or what type of investment products you use. Yet, there are times when we might refer you to relevant professionals better positioned to handle certain areas of advice.

By connecting you with these experienced professionals who can support the advice we give you, we can better help you achieve all your goals.

A referral from us also provides valuable reassurance that you are working with trustworthy individuals who have the necessary skills and experience to take care of your wealth.

However, you may be unclear about when you need to work with a financial adviser and when you require help from elsewhere.

A financial adviser takes a holistic approach to your wealth to help you achieve your goals

The role of a financial adviser is to take a holistic approach to your wealth and create a plan with your goals at the centre.

During our initial meeting with you, we’ll discuss what your priorities are in life and, often, what you want your retirement to look like. We can then develop a plan to help you achieve this.

We may offer guidance in several areas including:

  • Saving for your retirement
  • Investing for your future
  • General budgeting
  • Protecting your income and your family
  • Planning tax-efficiently.

By drawing up a plan that covers these areas, we seek to help you achieve your unique goals.

We also use cashflow planning to give you an indication of how different strategies could affect your wealth. For example, we might model how a modest increase in pension contributions could increase your retirement pot later in life.

This helps you plan ahead, and it may be useful when accounting for potential expenses such as care costs.

In some cases, we can help you with more specific actions related to your financial plan. For instance, we might help you move your pension savings into a different scheme or give you guidance about setting up the right life insurance or income protection for you.

We may also manage investments on your behalf and point you towards the most suitable products for your goals.

However, there are some specific tasks which, although an important part of your financial plan, are typically handled by somebody who specialises in that area.

Here are three situations when a financial adviser may refer you to another professional.

1. Will writing and estate planning

If you follow your financial plan, you may build up significant assets throughout your life. It’s important to decide what happens to those assets when you die. This is where your estate plan comes in.

We can discuss your wishes with you and consider the tax implications of passing your wealth to your loved ones. However, when it comes to creating a Will or putting a Lasting Power of Attorney (LPA) in place, we will typically refer you to a specialist in this area.

They are responsible for drawing up and authorising the necessary paperwork to make your estate plan legal. They may be able to guide you if you have more complex estate plans too – if you are part of a blended family, for instance.

You will also likely work with a solicitor when a loved one dies. They will guide you through the probate process and help you manage your family member’s estate.

2. Setting up a trust

A trust is a legal arrangement that allows you – the “settlor” – to give permission for “trustees” to manage certain assets on behalf of “beneficiaries”.

There are several reasons why you might use trusts to support your financial plan including:

  • Controlling and protecting family assets
  • Looking after assets for beneficiaries who are too young to handle their own affairs
  • Handling assets for somebody who is incapacitated
  • Mitigating Inheritance Tax – for more information on this, you can read our recent article here:
  • Passing on assets while the settlor is alive or after they die.

We may recommend that you use trusts for estate planning or tax planning and we can discuss the potential benefits with you.

However, setting up a trust can be very complicated and there are several different types that you may use, depending on the situation.

You typically need a specialist who has a clear understanding of the rules and can help you determine the best type of trust to use to achieve your goals.

Setting up a trust without this expert guidance could lead to costly mistakes that harm your financial plan, so it’s crucial to work with an experienced trust specialist.

3. Handling tax affairs

Finding ways to mitigate tax may be an important part of your financial plan as it could enable you to keep more of your wealth.

When we discuss your savings and investments, or how you draw from your retirement savings, we will likely talk about ways to potentially mitigate tax.

For example, we can give you guidance about tax wrappers such as ISAs or explain how pension contributions might help you cut your Income Tax bill.

However, you may need to discuss certain specifics about your tax affairs with an accountant instead of a financial adviser. Tax relief on pensions is a good example of this.

If you are a higher- or additional-rate taxpayer, we will likely stress the importance of claiming all the tax relief you are entitled to and how this may help you mitigate a large Income Tax bill.

Yet, you may need an accountant to help you file your tax return and claim the tax relief. You will likely need to speak with an accountant about tax affairs if you are a business owner too.

Get in touch

We can help you create a financial plan and refer you to the right professionals for any work outside the scope of our services.

Email or call 0333 241 9900.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning, cashflow planning, tax planning or Will writing.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term (minimum of 5 years) and should fit in with your overall risk profile and financial circumstances.

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