Frequently Asked Questions

Compound interest makes a huge difference to investment returns over time. Over the long term (1900-2022), the annualised real return on UK equities was 5.3% while the annualised real return on cash was 0.9%. Since 1950, the annualised real return on global equities was 6.7%. Source: Credit Suisse Global Investment Returns Yearbook 2023 Summary Edition.

Example:

The real money difference can be profound for investors.

Using the average size of a UK pension pot, £37,600, and assuming the average real returns above, the difference between investing in cash and UK equities is significant:

Over 20 years, the difference in the total amount is £60,963.

Over 30 years, the difference expands to £141,508.

Over 40 years, the difference reaches a massive £289,950.

A 1% difference in annual return, when compounded over time, can result in a noticeable variance in the final amount. This emphasises the impact of compound interest and how even small differences in return rates can significantly affect the growth of an investment over the long term.

Example: 1% v 2%

Assuming an initial investment of £10,000, no additional contributions, and compound interest applied annually, let's compare an annual return of 1% with an annual return of 2%: over 20 years the difference is £2,640; over 30 years £4,646; and 40 years £7,129.

Example: 6% v 7%

Now let's compare the difference between an annual return of 6% with an annual return of 7%: over 20 years the difference is £6,625; over 30 years £18,688; and 40 years £46,887.

Paying for financial coaching and guidance can be viewed as an investment in oneself. The potential benefits—ranging from improved financial health to peace of mind—often outweigh the costs.

Accountability and Discipline

Having financial coaching can be akin to having a personal trainer for your finances. Just as people are more likely to stick to a fitness routine when they have scheduled sessions with a trainer, they're also more likely to stay on track with financial goals after receiving coaching.

Education and Skill Development

Many people lack formal education on financial topics. Financial guidance can fill in these knowledge gaps. With enhanced financial literacy, individuals can make more informed decisions, potentially leading to better outcomes and fewer costly mistakes.

Emotional and Psychological Support

Money can be a significant source of stress, anxiety, and even conflict in relationships. Financial decisions are often emotionally charged, and having a neutral third party can help in navigating these emotions. Financial coaching can provide not just tactical advice but also emotional support, helping people stay calm during market downturns, make objective decisions, and navigate financial challenges with clarity.

Personalized Financial Strategy

Everyone's financial situation, goals, and risk tolerance are unique. A one-size-fits-all approach rarely works when it comes to managing money. Financial coaching provides a framework to help individuals choose an effective pathway to achieving their personal financial goals.

Not enough.

In 2022, just 8 per cent of UK adults had taken financial advice over the past year and 3.1mn people in the UK had an ongoing relationship with a financial adviser. However, over 20m people have a workplace pension. Source: Financial Times.

Almost 20 percent of advisors will only accept new clients with more than £200,000 to invest. The percentage of advisers accepting new clients with less than £50,000 in financial assets has plunged to 32 percent from 52 per cent in 2019. Source: Schroders Adviser Survey 2022.

In 2017, the International Longevity Centre UK published its report, The Value of Financial Advice, which quantified, for the first time, the value of taking financial advice for people’s overall financial outcomes.

Receiving professional financial advice between 2001 and 2006 resulted in a total boost to wealth (in pensions and financial assets) of OVER £47,000 in 2014/16.

The benefits of financial advice are potentially greater for those we term “just getting by” than for those we consider “affluent” - the former would have seen a 24% boost to their pension wealth compared to 11% for more affluent groups (those most likely to be advised).

A DIY (Do It Yourself) Investing Platform provides you with the online "tools" and "materials" to pick and manage your own investments. It's a place where you can buy, sell, and keep track of stocks, bonds and other investments by yourself.

Strong regulatory requirements mean you can confidently hold all your investable assets on investment platforms.

The largest DIY trading platforms include Hargreaves Lansdown;, interactive investor; AJ Bell; and Fidelity. Source: This is Money.

Compare and Invest have developed an investment platform comparison tool.

No.

Seven Eight Investing is an investment coach providing investment education for potential investors. An IFA is regulated by the Financial Conduct Authority (FCA) for the purpose of providing specific investment advice and making investment recommendations.

According to MoneyHelper, the UK average rate is about £150 an hour. A set fee for a piece of work could cost several hundred or several thousand pounds. Many advisors charge a fixed percentage of assets per year.

MoneyHelper is a free service provided by the Money and Pensions Service. The Money and Pensions service is an arm’s-length body, sponsored by the Department for Work and Pensions.

Seven Eight Investing recommends Unbiased.co.uk.

Unbiased has over 27,000 independent advisors listed on their platform.

No.

Bitcoin is considered the highest risk asset by professional investors. It is a largely unregulated product currently and highly volatile.

In October 2023, the UK’s FCA introduced tough new rules for marketing cryptoassets.

Potential investors should be prepared to lose all of their capital and as such should only invest a small portion of their investable assets.

A 2018 study by Yale economists suggested that if an investor believes that Bitcoin will perform as well as it had historically, they should hold 6% of their portfolio in Bitcoin. If they believed that it would do half as well, they should hold 4%. In all other circumstances, if the belief was that it would do much worse, then only 1% should be held.

Many people believe that Bitcoin, as a crypto currency could replace gold as a store of value. Today the market cap of Gold is over $13 trillion v $580bn for Bitcoin. Source: Infinite Market Cap.