You might feel confident with everyday financial matters like bank accounts, choosing an energy provider and shopping around for insurance. But when it comes to pensions and investments, you may find yourself wanting expert help.

Say you want to take an income from your pension or pass on an inheritance for instance, but don’t know the best way to do it? At times like this, your two main options for help are ‘financial guidance’ and ‘financial advice’.

Financial guidance vs. financial advice

Here’s a quick summary of the differences between financial guidance and financial advice:

  Financial Guidance Financial Advice
Free to use Yes No
Impartial Yes Yes
Protected by the Financial Services Compensation Scheme No Yes
Regulated No Yes
Personal recommendation given No Yes

Financial advisers are usually better qualified to help you with your pensions and investments than someone offering financial guidance. Plus, they’re regulated, which means they’re approved by the Financial Conduct Authority (FCA) to provide advice and you’re protected should anything go wrong. Before we get into financial advice however, let’s take a look at financial guidance in a little more detail.

What’s financial guidance?

You can get free guidance from the government and some pension providers. Here are some of the organisations you can book a phone call or face-to-face appointment with:

  • Pension Wise helps over 50s with defined-contribution pensions to navigate their many retirement options. As well as free phone appointments and face-to-face meetings to talk about your retirement plans, you can also contact them online.
  • The Money Advice Service offers free online information and guides, as well as support over the phone and online chat. They’ll help with all financial issues, including debt and mortgages as well as pensions and insurance.
  • The Pensions Advisory Service is a free government-funded service providing online information and guidance on pensions, including help over the phone or webchat.

Why take financial guidance?

Government services and pension providers’ staff are well-trained and have often worked elsewhere in the financial services industry.

And because it's free, you can take guidance as a ‘no regrets’ introduction to any issues you’ll deal with when making decisions about your pension planning.

However, keep in mind, guidance services will not offer you financial advice. That is, they won’t tell you what the best course of action is for you.

If that’s what you’re looking for, you might consider paying for financial advice instead.

What’s financial advice?

With financial advice, you’ll get a personalised recommendation on how to achieve your financial goals.

For example, a financial adviser could provide you with a plan to make more effective use of your tax allowances. Or recommend how best to leave an inheritance to your loved ones tax-efficiently.

You could ask an adviser to draw up a plan for investing your pension. As well as recommend the best way for you to take an income from your pension.

Overall, financial advisers can offer different services such as:

  • Pension and retirement planning, including defined contribution and defined benefit schemes
  • Investment planning
  • Inheritance planning
  • Tax planning

Financial advisers can help you choose investments for your defined contribution pension, manage your income drawdown, choose an annuity, get advice on equity release and plan for retirement in general.

Defined benefits advisers will help you if you’ve got a defined benefits pension – also called a Final Salary pension.

An adviser should be able to tell you whether they can help with what you need, or if you’re better off speaking to an adviser in another specialist field.

Should I get independent or restricted financial advice?

Financial advisers can offer either independent or restricted advice.

  • Independent advice mostly covers advice and a recommendation on products from all providers in the market, to meet your financial needs and wants.
  • Restricted advice can mean a number of things:
    • The adviser is restricted to one specialist topic, such as pensions or inheritance planning.
    • The adviser may not provide advice on all products or all areas of advice. 
    • The adviser only recommends products and investments from a limited range of product providers.

How much does financial advice cost? 

You should pick an adviser and a fee structure that best suits your own needs and requirements.

One thing to note is that financial advisers can offer both initial and ongoing advice.

Initial advice will give you the recommendation on how to achieve your financial goals, while ongoing advice will provide future reviews of the recommended plan to make sure it continues to meet your needs.

There are four main fee structures available, depending on the adviser you speak to.

Percentage of your investment

The fee will be a percentage of the amount of money being advised on.

There may be two percentage-based charges, one for initial advice and one for ongoing advice. Typical fee ranges can be:

  • 1 to 4% one-off charge for initial advice, based on the value of the amount you have available to invest
  • 0.5% to 1% annual fee for ongoing advice – usually paid monthly – based on the value of your investment

The percentages may look small, but they can add up if you have a lot of money to invest. Converting the percentage charge into a monetary amount can help you work out how much you might need to pay for financial advice.

Hourly rates

Hourly rates can typically range from £100 to £300. As a guide, it can take a financial adviser anything between eight and 12 hours to research and produce a recommendation for you. In some cases, it could take even longer.

The rate also depends on how well qualified the adviser is and the type of advice given. Plus, the adviser’s location can also be a factor. For example, advice given by an adviser based in London may be more expensive than elsewhere in the country. 

A fixed fee

This is most common when advice is given on a very specific topic, such as how to invest your pension. Your adviser will let you know when a fixed fee is applicable.

A monthly fee

This fee is usually a percentage of the fund value to cover ongoing advice. For example, advice about withdrawal and investment for people who are taking an income from their pension.

Advice charges

No matter how an adviser charges for advice, they must give you a fee schedule setting out how they charge. This schedule will detail your payment options available and the range of likely charges.

Questions a financial adviser can help you with

Should you decide to get a financial adviser, it’s best to prepare a list of questions to get the most out of your time with them. Here are some example questions to get you thinking:

  • “Are my investment choices the best ones for me?”
  • “How much will I pay in taxes?”
  • “Will I have enough to retire on?”
  • “Is my final salary or defined benefit pension still right for me?”
  • “Should I transfer my different pensions into one pot?”
  • “How can I get the retirement income I want?”

Remember, advisers are providing a service – and as with all good service providers, a good adviser will ensure you understand all your options before you progress.

If you’re unsure, you have every right to ask the adviser to clarify your options. And if you’re still not clear, you should ask again. After all, it’s your money.

How to find a financial adviser

As you can see, you’ve got many things to consider when choosing a financial adviser.

If you’re considering getting advice from a financial adviser but unsure where to look, check out

The advisers listed on the website are regulated by the relevant official bodies, appropriately qualified and independent of product providers.

Aviva Financial Advice

We have our own financial advice team that can help you too, whether you’re new to Aviva or already a customer. Any recommendations our advisers make will be for Aviva products and services only.

For example, an Aviva financial adviser can advise you on your retirement planning options, such as how to invest your pension and whether an annuity is right for you.

To find out if we can help you, book a call back with us. We’ll contact you at a time that suits you best.

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