Who uses a financial advisor?

uncle_rufus said:
Apologies for the necro but I thought it's better than starting another thread with basically the same title...

I am debating whether I should look into an IFA - have just gotten a new job and it's going to come with tax considerations that I really have never dealt with before, plus a bunch of equity in the new company which vests over several years and although I've been trying to research my options myself I don't want to make any mistakes so it would be good to run it by someone who knows what they are talking about

The only advice I got from friends was basically "a lot of IFAs will give advice for free then try to sell you stuff so you can just take the advice then tell them to **** off"... but I'm unsure if that's actually true?
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How much over £100k? If it's negligible then the maths is quite simple.
 
dLockers said:
How much over £100k? If it's negligible then the maths is quite simple.
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Well that's what I thought as well... take total salary + bonus, subtract 100k... divide result by 12... that's approximately how much you need your pension contributions / SEIS investment / GiftAid / Whatever to amount to? Or something like that?
 
uncle_rufus said:
Well that's what I thought as well... take total salary + bonus, subtract 100k... divide result by 12... that's approximately how much you need your pension contributions / SEIS investment / GiftAid / Whatever to amount to? Or something like that?
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Yeah basically.

The only complication is your share purchase and how that works. I pay tax on the difference between fair market value and discounted value.

So the calculation for gross is basically:

Gross Pay
+ *expected value of shares discount (I work out how many shares I can buy based on todays prices/how much I expect to buy and then calculate the value of the discount)
+ any taxable benefits (e.g. private medical)

Then subtract total pension contributions
= adjusted net pay

As long as you keep adjusted net pay below 100k you are all good. You avoid tax on the pensionable bit as well so the hit to your pay for contributing £100 is like £30 in 'real money'.

Definitely sign up to a government tax account as you can then 'fix' your expected income to £100k which avoids any annoyances like them predicting it is going be X even though you'll be managing it to Y.
 
Sounds reasonable... the shares I think I get 25% vested at 1 year then the remainder is vested in chunks up until the 3rd or 4th year. But my understanding is once vested if I choose to sell then they are liable for both CGT (on any change in value from their original allocation) plus then taxed as income? Which kind of makes it feel like it's pretty much going to be impossible to sell the shares without simply accepting that they'll be taxed heavily (if I'm already sticking close to 100k adjusted net pay) - the best I could do is funnel all proceeds from selling into pension/SEIS/GiftAid whatever so that the tax isn't so bad (but obviously exclusively using it for those avenues defeats the point if I wanted to sell shares to actually pay for something!)
 
uncle_rufus said:
I am debating whether I should look into an IFA - have just gotten a new job and it's going to come with tax considerations that I really have never dealt with before, plus a bunch of equity in the new company which vests over several years and although I've been trying to research my options myself I don't want to make any mistakes so it would be good to run it by someone who knows what they are talking about

The only advice I got from friends was basically "a lot of IFAs will give advice for free then try to sell you stuff so you can just take the advice then tell them to **** off"... but I'm unsure if that's actually true?
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Historically that is kinda true though they have reformed the profession in recent years, there are a wide range of IFAs out there but they typically sell/consult on packaged products i.e. funds, pensions, life policies etc.. (some flog mortgages too)

The OP has characterising them as people who will help you pick stocks etc.. that is far from the mark for most, that's what full-service stockbrokers do.

Likewise, for solid tax advice, you might want to look for a dedicated tax advisor or a chartered accountant specialising in tax advice.

(that is assuming you've got other things sorted like your pension, life assurance policy etc..)
 
Purely based on the information you've provided, and the limited scope of your request - Accountant / Tax specialist would be more appropriate....

(That's from someone who is an IFA)
 
Okay cheers all, how expensive is an accountant likely to be? Expect it's something where I can pay a single cost for a one off review / set of advice? I don't think I'm likely to need to keep reviewing it constantly just need to know overall what I should be doing
 
Does your firm offer advice?

Mine does but LOL they were like sorry pal we only deal with folk with 2.5m liquidity. :(
 
uncle_rufus said:
Okay cheers all, how expensive is an accountant likely to be?
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How long is a piece of string?

Expect it's something where I can pay a single cost for a one off review / set of advice? I don't think I'm likely to need to keep reviewing it constantly just need to know overall what I should be doing
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Absolutely, find a local accountant and let them know the output you want. Is it just a meeting to discuss, or some kind of written follow up? Be aware we are legally required to do Know Your Client checks, and for ongoing relationships it's not much of an issue as the cost can be absorbed, but for one offs it tends to either put accountants off the work or lead to a bump to cost as it will never be recovered otherwise.
 
Pudney said:
Absolutely, find a local accountant and let them know the output you want. Is it just a meeting to discuss, or some kind of written follow up? Be aware we are legally required to do Know Your Client checks, and for ongoing relationships it's not much of an issue as the cost can be absorbed, but for one offs it tends to either put accountants off the work or lead to a bump to cost as it will never be recovered otherwise.
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Thanks, sounds okay to me - anything I should usefully watch out for to try and identify a decent one?
 
I'll be your financial advisor.

Buy nio under 21$ and INTC under 50$, don't use money you can't afford to lose, and don't sell for the next few years
 
uncle_rufus said:
Thanks, sounds okay to me - anything I should usefully watch out for to try and identify a decent one?
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Make sure they can talk confidently about:
  1. Difference between gross and net pension payments.
  2. Personal Allowance clawback.
  3. Understanding how SEIS and EIS operates for tax relief.
  4. Share schemes (this is a big one). At the least they should be asking:
    1. Share options or actual shares?
    2. If options tax approved or unapproved scheme?
    3. If shares any restrictions?
    4. If restrictions have you waived treatment on the market value at issue?
    5. Difference between when you pay Capital Gains Tax on the increase in share value and when you pay Income Tax (it's unlikely you'd pay both on the same amount).
    6. When you will also pay National Insurance on receipt of shares.
If they're thorough they'll hopefully ask about other sources of income, e.g. interest, rental, investment portfolios.

The top 2 should be bread and butter, 3rd should be pretty straightforward to someone who deals with Personal Tax routinely, the 4th is actually something I'd expect to trip people up as there is some complexity and specialist knowledge in there.
 
Diddums said:
I earned 6 marbles today.
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Pudney said:
Make sure they can talk confidently about:
  1. Difference between gross and net pension payments.
  2. Personal Allowance clawback.
  3. Understanding how SEIS and EIS operates for tax relief.
  4. Share schemes (this is a big one). At the least they should be asking:
    1. Share options or actual shares?
    2. If options tax approved or unapproved scheme?
    3. If shares any restrictions?
    4. If restrictions have you waived treatment on the market value at issue?
    5. Difference between when you pay Capital Gains Tax on the increase in share value and when you pay Income Tax (it's unlikely you'd pay both on the same amount).
    6. When you will also pay National Insurance on receipt of shares.
If they're thorough they'll hopefully ask about other sources of income, e.g. interest, rental, investment portfolios.

The top 2 should be bread and butter, 3rd should be pretty straightforward to someone who deals with Personal Tax routinely, the 4th is actually something I'd expect to trip people up as there is some complexity and specialist knowledge in there.
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Fantastic, thanks for that :) I'll start having a look at local accountants, guess I might be able to spot some reviews on one platform or another to help choose a few to ping emails to
 
To help with your own homework, ask your employer for all of the shares paperwork and ask if they offer a salary sacrifice scheme.

If they offer salary sacrifice you can save a bundle on national insurance.
 
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