When To Use A Tax Advisor

When to use a Tax Advisor

If you’re scared, short of time or don’t feel confident doing the research when looking for complex financial products, you’ll find financial advice worthwhile.

Yet if you’re money savvy, my instinct would be to DIY it, as it’s cheaper. This involves doing your own research. As well as the articles on this site, I wholeheartedly suggest a book by Which? called Be Your Own Financial Advisor* (my Money Diet* book is about cutting bills and MoneySaving, this one is on hardcore financial products).

However with complex financial products or, even more, the interaction of various complex financial products, professional help can be very useful, and it’s worth paying an adviser to ensure you get it right. Yet be aware they’re better at some things than others:

Annuities (pensions).

An annuity is the product you trade your pension in for each year when you retire, in order to get an annual payment for life. It’s a big one-off financial transaction, about which you can’t change your mind once done. As it’s crucially important that you check out the whole market for this, most people should consider an adviser.

If this is the only thing you’re using an adviser for, it’s worth looking at one of the three big specialist annuity advisers, Annuity Bureau, Annuity Direct and William Burrows.


The financial services industry, and many of its advisers, are culpable for the problems with endowments; yet they’re also often your best chance of sorting them.

If you have a sizeable endowment and are considering surrendering or selling it, the complexities can be huge; consulting an IFA to work through the options is often worthwhile. It’s also worth checking whether you’re eligible to complain about a missold endowment; the compensation can be worth thousands (read the Endowment Misselling article).

Financial and tax planning and structuring. At the high end finance can be complex; there’s a range of sometimes impenetrable products that can be useful but are tough to understand. Here a good IFA can really prove him or herself.

Choosing an investment is about assessing the risk and trying to second guess the markets. It’s important to remember advisors don’t have a crystal ball; their choices for you are best guesses, not certain knowledge.

While research helps, there’s always an element of gambling when it comes to investment picking. If you go it alone, you get a head start because, do it right, and there are no charges (read Discount Brokers article). So the IFA has to pick substantially better than you to make up this difference.

Having said that, planning, structuring and timing investments for events (e.g. funding university fees) can be very complex and here IFAs can come into their own.