Do Self-Employed People Need a Financial Adviser?

A financial adviser is a specialist who can look at your personal circumstances and financial goals and recommend products and services to help you.

There are two types of financial advisers in the UK:

• independent financial advisers (IFAs): offer unbiased advice about a wide range of financial products and services available from different providers.
• restricted advisers: provide advice on a limited range of products and services. That’s because they might specialise in one area such as pensions or mortgages.

Generally speaking, an independent financial adviser offers the widest range of advice and product recommendations available.

All financial advisers must be registered with the Financial Conduct Authority (FCA). That means they must treat you fairly and offer accurate advice.

You can check if a financial adviser is authorised by checking the FCA services register.

If a financial adviser isn’t registered with the FCA, you can make a complaint to the FCA.

A financial adviser can help with most aspects of your financial life as a self-employed person.

Some of the main areas they can support you with include:

• Understanding taxes: a financial adviser can help you get to grips with what taxes you need to pay. They can also offer tax-efficient strategies to help you preserve the wealth you build.
• Building a pension: as a self-employed person, you’re in charge of putting money aside for a pension. A financial adviser can help simplify this process and help ensure you set enough money aside and invest strategically to afford a comfortable retirement.
• Income protection: ensuring you have the right insurance to protect your income is vital when you’re self-employed. An adviser can look at your circumstances and recommend the most suitable income protection insurance policies to give you a safety net in case something unexpected affects your earnings.
• Savings and investments: an adviser can help direct you to the most effective savings and investment strategies to grow your wealth for the future.
• Finding a mortgage: finding a mortgage can be challenging when you’re self-employed due to fluctuating income. An independent financial adviser or mortgage broker could help you identify the deals you’ll be most eligible for.
• Budgeting and money management: if you need help creating a plan to achieve your financial goals, speaking with a specialist can help break down the steps you need to take. They can also help identify changes you might need to make with your spending and ways to save.
• Estate planning: if you achieve financial success as a self-employed person, you might have assets to pass on. A financial adviser can take a look at your finances and help you work out what your inheritance tax liabilities might be.

Financial advice normally comes with a cost. You’ll usually have to pay:

• an hourly rate
• a fixed fee for all of the advice
• a fee based on the percentage of money you invest

Your financial adviser must tell you how much the advice will cost before you use their services.

Shopping around is the best place to start. Contact different financial advisers and compare their offerings and rates.

Next, create a shortlist and double-check they’re FCA-regulated using the financial services register.

Financial advice could help you better understand your financial circumstances and how to manage your money as a self-employed person.

If you’d like to speak with someone about your situation, you can book a free, no-obligation chat with one of our advisers. You’ll find out where you stand and what it would cost, with no pressure to go further.