It’s tempting to think that you’ll always be able to handle all your finances yourself. With so many apps and online resources available, shouldn’t it be easy?
If you only lead a simple financial life – with a salary, an ISA and perhaps a few shares – then perhaps you can. But when things get a little bit more complicated, sorting out your money suddenly stops being a simple, Sunday afternoon activity.
If managing your finances is turning into a huge chore, it could be time to bring in a professional wealth management advisor. Throughout your life, certain circumstances could make their expertise truly valuable.
When your financial life gets complex
Certain changes in your life can trigger more complicated financial management. Multiple income streams, for example, might make earnings harder to track and organise if you’re sorting things out alone.
If you own a business, you don’t need to be doggedly self-sufficient. Managing assets, trusts or cross-jurisdiction tax can be intense and time-consuming, taking you away from important tasks at work.
When your financial habits go beyond everyday spending and simple investments, it’s worth finding some support. Trying to save money by doing it yourself could cost you more in the long run.
Just as your asset base crosses a threshold
Sometimes, it’s just the sheer volume of assets that makes professional advice essential. There’s no magic number, but many people start to consider professional guidance more seriously when their investable assets cross the £250,000 mark or higher.
At lower levels, you’ll probably be focused just on accumulating capital. But as your wealth grows, the focus might shift to preserving what you have – and for the long-term. When you’re moving from an amateur investor to what’s known as “high net worth,” you’ll need more sophisticated strategies.
At this stage, engaging wealth management expertise could help to protect your capital. Their access to specialised investment vehicles and bespoke planning tools can significantly boost your profitability.
When tax, inheritance or succession issues arise
A wealth management advisor can bring structure to your affairs when things get complicated. This would typically centre around three areas of your finances:
- Tax efficiency: An advisor wouldn’t just show you how to fill out forms. They can help with structuring your affairs by using ISAs, pensions and other vehicles to legally minimise your tax obligations.
- Estate planning and trusts: If you’d like to make sure that your wealth passes smoothly into the next generation, an advisor will be critical. They can help with inheritance planning and setting up or managing trusts.
- Generational wealth transfer: Planning for your family’s future is serious business. An advisor can help you navigate tricky succession issues, including deciding when and how to transfer assets.
During major life events or transitions
Finally, life rarely goes exactly to plan. Throughout major changes and periods of upheaval, your financial priorities might shift dramatically. These transitions are the moments where bespoke advice becomes truly critical.
Key moments where standard rules rarely apply include:
- Selling a business: This often results in windfall and complex capital gains tax that need strategic handling.
- Retirement: Moving from earning money to drawing an income requires a total restructuring of your portfolio.
- Divorce: Untangling joint finances and dividing assets fairly is a sensitive and complex task.
- Relocating abroad: Moving country means new tax laws and new rules. You need an expert to help you manage your assets correctly.
While managing simple, household finances is fine to do on your own, you should consider professional support when complexity, scale, or major life changes come into play. It’s not just a luxury; it’s an investment for peace of mind.
