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By Holly Black
The Guardian
"If your husband were to die tomorrow, would you be able to get by financially?”
I’m sitting in a warm meeting room across the desk from a man I’ve never met before, and I don’t know the answer to his question.
It’s probably something I should have thought about but it’s not a problem I particularly want to consider. Yet the answer to this question will determine where I invest my pension, which types of insurance I need and how much I should set aside for a rainy day.
Like millions in Britain, I have never taken financial advice before. I know I should have, I know it will benefit me and I realise that I write about money for a living, but it’s one of those items on the to-do list that can always be put off for another day.
I doubt if I’m alone in not especially relishing the idea of discussing my finances with a stranger, and I don’t enjoy having to think about my death, even if it is – hopefully – several decades away.
I’ve also assumed that advice is going to be expensive and secretly wondered whether I can’t just sort everything out myself.
But I’ve recently become self-employed and it has forced me to consider the company benefits I’ve lost – life assurance, employer’s pension contributions and sick pay – and my lack of a concrete plan for the future.
The number of self-employed people in Britain has increased by 23pc over the past decade, to almost five million.
The problem is that the self-employed typically save less than those in employment and are less likely to contribute to a pension scheme, while just 4pc of those who work for themselves have insurance that will cover them if they are unable to work.
The Guardian
"If your husband were to die tomorrow, would you be able to get by financially?”
I’m sitting in a warm meeting room across the desk from a man I’ve never met before, and I don’t know the answer to his question.
It’s probably something I should have thought about but it’s not a problem I particularly want to consider. Yet the answer to this question will determine where I invest my pension, which types of insurance I need and how much I should set aside for a rainy day.
I doubt if I’m alone in not especially relishing the idea of discussing my finances with a stranger, and I don’t enjoy having to think about my death, even if it is – hopefully – several decades away.
I’ve also assumed that advice is going to be expensive and secretly wondered whether I can’t just sort everything out myself.
But I’ve recently become self-employed and it has forced me to consider the company benefits I’ve lost – life assurance, employer’s pension contributions and sick pay – and my lack of a concrete plan for the future.
The number of self-employed people in Britain has increased by 23pc over the past decade, to almost five million.
The problem is that the self-employed typically save less than those in employment and are less likely to contribute to a pension scheme, while just 4pc of those who work for themselves have insurance that will cover them if they are unable to work.
How to find the right adviser
Word of mouth is often the best way to find a financial adviser – try asking friends, family and colleagues for recommendations. Your best bet is someone who is at a similar stage of life to you. You can also find a database of independent financial advisers at unbiased.co.uk, where you can search by both region and specialism.
It is worth meeting two or three advisers before you decide who to use – remember that this is someone you need to trust to discuss your financial affairs with, so it’s a big decision.
Check that your adviser has relevant qualifications, such as Chartered or Certified Financial Planner, or that the firm has technical experts who specialise in the areas you need help with.
An initial meeting with an adviser should be free of charge and with no obligation to use their services. You should never feel pressured into using an adviser or any of their suggestions; rather the two of you should be working together.
Make sure you understand exactly how much you will be paying and what you can expect in return. You should be able to choose whether you pay a fixed fee, hourly charges or a percentage of the value of your investments.
Depending on your requirements you may need to meet your adviser once or twice a year, or perhaps just once every few years until your needs become more complex. Advisers can also provide one-off advice if you have a specific problem such as moving a pension or setting up insurance to protect your family.
Suddenly, I realise, it’s time for financial advice to move to the top of the to-do list. So I find myself at the offices of Plan Money, an advisory firm, in a pretty village just outside Colchester, Essex, with a man wearing a casual Oxford shirt, blue jeans and trendy, thick-framed glasses.
This man is my new financial adviser, and he wants to know about my outgoings, my aspirations and my plan if something were to go wrong.
It’s strange for me to be the one answering questions while someone else takes notes – as a journalist I’m used to being the one with the pen and notepad – but Pete Chadborn, who set up Plan Money in 2003, takes a soft approach. In fact, I fully expected his questions to be more probing than they turn out to be.
We talk about how much I have left to pay on my mortgage and what sick pay my husband gets, and I produce a dog-eared letter from my old company pension scheme.
I’m bracing myself to be chastised for not having contributed to the pension since I left my job in April last year and am surprised when Mr Chadborn says there are more important things to worry about for someone approaching the age of 30.
Instead, he’s more interested in the lack of protection we have in our household. My husband’s employer doesn’t offer life assurance and pays only statutory sick pay, while my own protection is non-existent.
If my husband were unable to work, asks Mr Chadborn, would my unpredictable freelance earnings be enough to cover us?
It is worth meeting two or three advisers before you decide who to use – remember that this is someone you need to trust to discuss your financial affairs with, so it’s a big decision.
Check that your adviser has relevant qualifications, such as Chartered or Certified Financial Planner, or that the firm has technical experts who specialise in the areas you need help with.
An initial meeting with an adviser should be free of charge and with no obligation to use their services. You should never feel pressured into using an adviser or any of their suggestions; rather the two of you should be working together.
Make sure you understand exactly how much you will be paying and what you can expect in return. You should be able to choose whether you pay a fixed fee, hourly charges or a percentage of the value of your investments.
Depending on your requirements you may need to meet your adviser once or twice a year, or perhaps just once every few years until your needs become more complex. Advisers can also provide one-off advice if you have a specific problem such as moving a pension or setting up insurance to protect your family.
Suddenly, I realise, it’s time for financial advice to move to the top of the to-do list. So I find myself at the offices of Plan Money, an advisory firm, in a pretty village just outside Colchester, Essex, with a man wearing a casual Oxford shirt, blue jeans and trendy, thick-framed glasses.
This man is my new financial adviser, and he wants to know about my outgoings, my aspirations and my plan if something were to go wrong.
It’s strange for me to be the one answering questions while someone else takes notes – as a journalist I’m used to being the one with the pen and notepad – but Pete Chadborn, who set up Plan Money in 2003, takes a soft approach. In fact, I fully expected his questions to be more probing than they turn out to be.
We talk about how much I have left to pay on my mortgage and what sick pay my husband gets, and I produce a dog-eared letter from my old company pension scheme.
I’m bracing myself to be chastised for not having contributed to the pension since I left my job in April last year and am surprised when Mr Chadborn says there are more important things to worry about for someone approaching the age of 30.
Instead, he’s more interested in the lack of protection we have in our household. My husband’s employer doesn’t offer life assurance and pays only statutory sick pay, while my own protection is non-existent.
If my husband were unable to work, asks Mr Chadborn, would my unpredictable freelance earnings be enough to cover us?
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The main job of a financial adviser, it seems, is to force you to confront those difficult questions that you have put to the back of your mind.
If one of us died, would the other be able to cope with the mortgage and other household expenses? For how long? What about if one of us got sick and the other became a carer?
I ask about wills – neither of us has one. I’m not alone in this: research shows that only around a third of people in Britain have a will in place and more than 18 million have never even considered writing one.
I’d assumed that because we’re married it’s automatically taken care of, but apparently that’s not the case. Joint accounts and shared assets can be frozen if there is no will in place, in case anyone makes a claim on your estate. It could add unnecessary stress and delay to a difficult situation.
It’s all worst-case scenario stuff to which the optimist in me wants to respond, “it’ll never happen to me”. But I know that’s naive.
Getting life assurance or illness cover is a counter-intuitive sort of purchase, says Mr Chadborn, because you buy it in the hope that you’ll never need it.
If one of us died, would the other be able to cope with the mortgage and other household expenses? For how long? What about if one of us got sick and the other became a carer?
I ask about wills – neither of us has one. I’m not alone in this: research shows that only around a third of people in Britain have a will in place and more than 18 million have never even considered writing one.
I’d assumed that because we’re married it’s automatically taken care of, but apparently that’s not the case. Joint accounts and shared assets can be frozen if there is no will in place, in case anyone makes a claim on your estate. It could add unnecessary stress and delay to a difficult situation.
It’s all worst-case scenario stuff to which the optimist in me wants to respond, “it’ll never happen to me”. But I know that’s naive.
Getting life assurance or illness cover is a counter-intuitive sort of purchase, says Mr Chadborn, because you buy it in the hope that you’ll never need it.
Listen now: It's Your Money Podcast
Listen to the new It's Your Money Podcast, from the Telegraph Money team.
In this week’s episode: a third of children who go to private school get some help with fees – we explain how to find your way through the system and how some children get 110pc bursaries.
We also tackle the thorny topic of how couples talk about money, we look at how to make sure your charitable donations are really going to fund good causes and, finally, we talk about how to use your savings and investments to get an extra pay cheque each month.
Listen here, or head to iTunes and search for 'It's Your Money'.
His own charges aren’t mentioned until the end of the meeting. Financial advisers have come in for a lot of flak from regulators in the past for making out that they were giving free advice while pocketing hefty commissions for selling products.
New rules, which came into effect in 2012, put a stop to this and now advisers have to be explicit about how much they charge.
This first session is free of charge and I’m under no obligation to use Mr Chadborn as my adviser. He’ll email me in a couple of days with an outline of what he would suggest, were we to proceed.
Assuming that I go ahead and follow his recommendations I will pay a one-off fee of a few hundred pounds and then a small percentage thereafter, based on the work he carries out.
In the meantime, I have homework: go and have a difficult conversation with my husband about what our outgoings are and what size lump sum either one of us would want as a buffer should the worst happen.
If I expected that financial advice would involve being reprimanded for my lack of engagement and then being told exactly what I should be doing, I’ve been proved very wrong.
This journey, it seems, is going to be a joint effort between me and Mr Chadborn, and it’s going to involve me tackling some tough questions head on.
In this week’s episode: a third of children who go to private school get some help with fees – we explain how to find your way through the system and how some children get 110pc bursaries.
We also tackle the thorny topic of how couples talk about money, we look at how to make sure your charitable donations are really going to fund good causes and, finally, we talk about how to use your savings and investments to get an extra pay cheque each month.
Listen here, or head to iTunes and search for 'It's Your Money'.
His own charges aren’t mentioned until the end of the meeting. Financial advisers have come in for a lot of flak from regulators in the past for making out that they were giving free advice while pocketing hefty commissions for selling products.
New rules, which came into effect in 2012, put a stop to this and now advisers have to be explicit about how much they charge.
This first session is free of charge and I’m under no obligation to use Mr Chadborn as my adviser. He’ll email me in a couple of days with an outline of what he would suggest, were we to proceed.
Assuming that I go ahead and follow his recommendations I will pay a one-off fee of a few hundred pounds and then a small percentage thereafter, based on the work he carries out.
In the meantime, I have homework: go and have a difficult conversation with my husband about what our outgoings are and what size lump sum either one of us would want as a buffer should the worst happen.
This journey, it seems, is going to be a joint effort between me and Mr Chadborn, and it’s going to involve me tackling some tough questions head on.
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