We’re all used to taking our cars for their MOT, aren’t we? Before we book it in for the test, we may well get a mechanic to check the vehicle over to make sure it will pass with flying colours. It’s a useful time to put in new brake pads, check the suspension and make sure the lights are all in working order.
This got us thinking that in some respects, our finances are no different to a car. They too could often benefit from a bit of fine-tuning from time to time to ensure they’re running at optimum performance and that our investments are working as hard as they might.
Of course, it’s a legal requirement to make sure our cars are roadworthy but there’s no such law for our money – it’s just up to to the individual to make sure your finances are maintaining a high level of performance. This is why it can be worth asking a financial adviser for a financial MOT or healthcheck. It’s an opportunity to not only check what you already have in place but to also consider ‘new parts’ you may want to install.
It’s all too easy, for example, to think your pension will just grow at its own speed and not pay it much attention. By enlisting the help of a financial adviser, though, you can check your pension fund is invested in a way that is getting the best return for you. Investment group, Bestinvest, has stated that twenty six of the top funds in the UK, containing £6.4 billion, are badly underperforming, and have been doing so for three years. In fact, at times, they have failed to meet their targets by over 5 per cent. An adviser will be able to monitor the situation and, if necessary, transfer your savings into better performing funds.
Another ‘new part’ you may decide to investigate may be insurance. You could already have life assurance in place but realise you don’t have any critical illness cover and are leaving you and your family exposed if you experienced a serious health setback. Or you could review your savings and realise you’re not making the most of your potential tax-free returns through the various ISA products available.
Whatever your particular situation, maybe it’s worth booking yourself in for a financial MOT to make sure your finances are fit for your current circumstances.