Why Hire an IFA in 2019?

Posted on: 1st January 2019 in Finance

Brexit is coming!

Brexit will continue to impact the financial affairs of all Brits – and not just expats living in the EU and EEA. Uncertainty is affecting all areas of finance, from currency to mortgage prices. So financial planning is in the spotlight.

Brexit has had both positive and negative effects and will continue to do so.

One unexpected positive effect of Brexit was in pensions. The price you can get for your Defined Benefit (DB) pension has gone up sharply in the last year because Brexit uncertainty has made pensions more expensive for employers. This rise in Cash Equivalent Transfer Value (CETV) has had the knock-on effect of making transferring out of DB pensions more popular.

On the downside of Brexit for expats, we already know that a No Deal could lead to a "cliff edge" of incompatibility between British and European financial systems – leading to potential problems paying private pensions to expats based in the EU. There has even been talk of Brit expats in the EU being sent back to the UK.

But experts are agreed that, despite the rumours, expats should be OK. A practical resolution to many future compatibility issues is likely to be worked out between the UK and European countries because there is a strong financial interest in doing so for both sides.

For the moment, though, the turmoil is set to continue. So are your finances up to whatever might happen next? An Independent Financial Adviser (IFA) is well-placed to help you make your finances Brexit-proof.

Consumer-friendly IFA regulation mounts

Regulation aimed at IFAs is only getting more intense. This is great news for consumers. Qualifications continue to be the priority, with Level 4 Chartered increasingly seen as respectable for IFAs in expat markets.

In October 2018, the UK’s Financial Conduct Authority (FCA) published "new rules aimed at improving the advice people receive when considering transferring their pension." Christopher Woolard of the FCA said, "we expect our interventions to improve the quality of the advice…"

Forge a natural alliance

Your IFA stands to gain if your portfolio gains – because it means he or she are great at their job. That’s good publicity for them – particularly with online peer review sites like Trustpilot now being so influential. So team up with an expert with shared goals!

Your IFA can bring four factors to the table that you are unlikely to have yourself:

• Qualifications in investment and personal finance.
• An independent perspective (although your IFA stands to gain if you do, they remain usefully detached – by virtue of having other clients, each with their own unique challenges and goals).
• A broad knowledge of what financial products are available, including where the best deals are and which to avoid.
• The experience to know how to make all the elements of your own financial picture work together – for a resilient, Brexit-proof 2019.

Quiz your IFA recruits

Due diligence is really important when it comes to scouting for any independent professional. With personal finance, there are certain questions you should ask of any IFA whom you are considering:

• How regularly will I able to speak to you if I need to?
• How regularly will you get in touch yourself?
• How regularly will you review my portfolio?
• Do you charge fees, earn commission – or both?
• Who are you regulated by?
• Can you provide testimonials?
• What experience do you have?
• What qualifications do you have?
• What happens if you leave the company you are with?
• Do you have specialist knowledge in some personal finance sectors?

LinkedIn is a good place to research IFAs before meeting them in person. If you are going to hire an IFA in 2019, put them through their paces first!