When To Get Help From An IFA

Sometimes it makes sense to pay for financial advice, other times it doesn't. Here's some guidance on when you should, reluctantly, reach for your wallet.

The Motley Fool's raison d'être is, and always has been, to give people the information they need to improve their finances. We show people that managing your money is actually quite easy once you strip away the confusing jargon. We give you the information you need to make decisions and to choose financial products yourself. It all makes financial advisors seem rather redundant and, in many ways, they are.

But that's not to say you should never use them. For some things, a financial advisor or other agent can be useful. For other things they are pretty much essential. Here's some guidance on getting further, er, guidance on your finances, and whether you should ever pay for it.

• Buy-to-let. You can get all the information you need to be a successful buy-to-let investor from the Internet. However, if you need help and advice getting tenants and managing your portfolio, you could pay a letting agent to handle it for you. Typically they take 10 to 15% of your rental income. Although they can be a big time-saver, make sure the figures add up before you commit to one. You still want to make a profit in the long run!
  
  
• Debt. Forget all the adverts from companies promising to help you manage your debt, you can get all the help you need for free on the Web and from charities or not-for-profit organisations. For more, see our Get Out Of Debt Centre.
  
  
• Insurance. Again, all the information you need is on websites like Fool.co.uk. Some products, like life insurance for example, are more complex than, say, car insurance. If you feel you need further guidance you shouldn't have to pay for it! Independent insurance brokers should be able to help you select the most suitable product.
  
  
• Investments. Back in the '90s, The Motley Fool was founded to teach people about investing and, although our remit has expanded considerably, it continues to do so. There's an investment strategy for everyone, depending on your attitude to risk, your personality and the amount of time you have to spend investing. With our site and others like it (but surely not better!), no one need spend a penny to learn how they want to go about investing or to pick up some tips. Still, if you need further guidance in choosing your investments, there are plenty of services available, such as our own share-tipping newsletter Champion Shares.
  
  
• Mini cash ISAs. These tax-free savings accounts are very simple and you can learn about them and choose easily online.
  
  
• Mortgages. You need to think hard about the sort of mortgage that will suit you and, indeed, whether you can even afford it! But yet again, the information is on the Web. Once you're armed with knowledge, you'll need help getting the right product as there are more than 8,000 to choose from. However, you can get this help from an independent broker that charges no fee, which is the principle behind the Motley Fool Mortgage Service.
  
  
• Pensions. Again we, like many sites, provide step-by-step guidance on pensions but, if push comes to shove, you may benefit from an IFA. You may find that you can get a better deal through an advisor. For example, by yourself you might be able to get an index-tracking pension (which is very Foolish) which charges, say, 1% a year. However, an IFA may be able to get precisely the same pension from the same provider for more like 0.5%, which could make a massive difference to your final pension pot, believe me! In more complex pension situations, like transfering out of an old company pension scheme, specialist advice can also be useful.
  
  
• Tax planning. The Web is full of tips on legitimately minimising our tax burdens. However, high net-worth individuals and people whose estate are likely to be subject to inheritance tax may do very well by speaking with a professional.
  
  
• Wills. We have an excellent guide on Wills & Probate (even if we do say so ourselves!) and there is plenty of information elsewhere on the Web. Even so, this is an unusually complex field and many of you have hundreds of thousands of pounds-worth of assets. You should ask yourself: is it really worth risking all these assets simply to save £100 or so? You would almost certainly benefit from paying for a registered Trust and Estate practitioner.

So you see, most of the information you need is readily available. Indeed, you can get it all from this very website. Check out our home page. From there you can find our financial guides, and compare and choose products.