Would you benefit from financial advice?

It’s hardly surprising some of us would like a bit of help with our finances. But how do you decide when you need guidance and when you need financial advice? And what’s the difference anyway?

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Many people are confident about researching and making decisions about their finances without professional help, but that’s not the case for everyone. We carried out research with YouGov in 2019 and found that 19.8 million people feel they would benefit from free financial advice.

Managing money can be daunting, especially dealing with more complex financial matters like mortgages, investments and pensions. Here's how to know the difference between guidance and financial advice so you can decide what's best for you.

Free guidance

There are several organisations offering free financial guidance including the government’s own Money and Pensions Service. They provide free specialist financial information but are not allowed to give a personal recommendation of where to save or invest your money. You are solely responsible for making sure any products you buy based on their information are appropriate for your needs.

Regulated financial advice

Alternatively, a regulated financial adviser will give specific advice around whether investing is right for you now, how much you should invest, and which investments best match your goals. They will manage your investments, meaning you don’t have to worry about them. You also have greater protection as advisers should be authorised and regulated by the Financial Conduct Authority (FCA), however you usually have to pay for regulated advice.

Our research with YouGov found that less than one in ten people had paid for advice in the last two years. Of those who hadn’t, three quarters were unlikely to do so in the future and when asked what would encourage them to do so, the top five changes were “I would need to be convinced it would save me money”, “I would need to be sure I could trust the advice”, “I would need to earn more money”, “I would need to be sure how to pick the right adviser” and “it would need to cost less”.

Adding value

Measuring how much value advice can add is difficult, but for complex products like investments and pensions, which can make a major impact on your future financial position, it can make sense to get help from a qualified adviser. A 2017 study by Royal London found that over the long-term, taking financial advice can add nearly £40,000 to the wealth of those on modest incomes.

While it’s true that some traditional financial advisers will not take on clients with small sums to invest, it’s not always the case. Some can also be pricey,charging an initial fee of anything from £75 to £350 an hour, or up to 5% of the value of the money being invested

At OpenMoney we provide personalised advice, no matter the size of your investment. You can start investing with us from as little as a £1 and our management fee is 0.76% or less per year, of whatever you decide to invest.

We use the right mix of smart technology and qualified human advisers to give our customers personalised advice that’s always in their best interests.

Finding the right advice

Here’s our five-point checklist to choosing the right advice:

1.     Workout what you need: A free financial guidance organisation or comparison site could help you choose home insurance or a new current account and provide useful information about more complex financial products. But you may be better going to a regulated financial adviser for investment and pension planning or a mortgage as these are big decisions which can have a major impact on your future finances.

2.     Decide whether meeting face-to-face is important, or if an adviser who holds meetings by phone or online would work – the latter might be more cost effective and offer greater flexibility outside normal working hours.

3.     Check the adviser’s specialism and qualifications: not all advisers cover all products, so make sure they deal with everything you need, and have at least the minimum qualifications required for the products you want to discuss.

4.     Understand the costs: some advisers don’t display their fees on their website, but even if they do, it’s worth clarifying up front all the fees you’d pay for initial and ongoing advice.

5.     Ask for a free initial consultation: many firms offer meetings to help you decide if you trust their advice and whether they will add value to your finances.


All figures are sourced from The UK Advice Gap: Are consumer needs for advice and guidance being met?

Remember, capital is always at risk when investing.
Fees correct as of 31/08/2022 and may exceed the stated value.

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