Thanks to the internet, the average person can now access vast amounts of information on just about any topic. That’s amazing in so many ways. It’s also potentially highly dangerous. There’s a difference between having access to information and being able to apply it appropriately in the real world. That’s why there’s still a place for skilled professionals.
The internet started as a professional network. Over time, however, it turned into the Wild West of information delivery. There was still plenty of high-quality content out there. The problem was finding your way to it through all the vast numbers of low-quality sites. Eventually, the one search engine got to grips with this by introducing the E-A-T guidelines.
E-A-T stands for expertise, authority and trustworthiness. Basically, it’s an approach to determining the quality of information on a web page and, by extension, the site on which it’s hosted. It is applied most strictly to what the search engines call “your-money-or-your-life” (YMYL) topics, including finance.
In principle, this means that you should be able to trust any information you find on any page ranked highly by a reputable search engine. In practice, the situation can be rather more complicated, especially with a topic as complex as finance.
From principles to practice
In finance, it’s often fairly easy for the average person to grasp basic principles. The challenge is to put them into real-world practice. There are two main reasons for this. Firstly, financial actions tend to result in financial reactions. Secondly, a lot of financial decisions have to be taken on the basis of educated guesses.
Shorter financial articles can do a great job of explaining basic principles. They cannot, however, go into any real detail about what you need to consider before you make a decision. As articles get longer, they can include more detail, but this makes them more complex and therefore harder to understand.
What’s more, even the longest articles have to be fairly general in nature. They may offer some case studies to illustrate their points. They cannot, however, provide specific guidance for each of their readers. Even when they provide online tools such as calculators, you still have to understand how to use them properly.
Firstly, you’re going to have to work out what data needs to be entered into them. Secondly, you’re going to need to make sure you perform the right calculation. Keep in mind that you may get different results depending on what location and time period you use. Thirdly, you need to interpret the result correctly.
The importance of a fresh perspective
Even if you’re confident that you fully understand all the information on the internet, there is still a reason why it’s a bad idea to try to be your own financial adviser, there may costs involved in doing this. Also, you’ll only ever see the world of finance from your own perspective. Getting help from a professional, by contrast, will let you get the benefit of a fresh pair of eyes and a new set of experiences.
In simple terms, a professional financial adviser is more likely to have greater knowledge and will be save you time as they can give you information on the things that you need to know rather than having to research every aspect. They also have great people skills and hence will adapt their advice to suit their client. If you’re a beginner, they’ll lead you through complex topics gently. If, however, you’re experienced with finance, they’ll happily get into the finer details with you.
These discussions can not only help you to avoid expensive mistakes, they can also help you find opportunities you might otherwise have missed. They can even help you gain insight into potential future developments such as changes to the tax regime. This gives you valuable extra time to consider how you might want to respond to them if they do occur.
There may be a fee for engaging a Financial Adviser
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen
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