Guidance vs advice – what’s the difference?
Guidance and advice are often used interchangeably. But when it comes to taking financial advice, they mean different things. So, let’s find out how they differ.
Last Updated: 1 January 2003
When you need help on your lifetime‘s worth of savings you need to understand what’s available, in what form and what fee is involved. It’s easy to see why so many may struggle to understand the difference between guidance and advice.
This article will help you understand the difference between the two.
What’s the difference between guidance and advice?
Guidance is generally an information-only service. This service will work with you to identify your options and help you narrow down your choices but will not tell you what to do or which product to buy. The decision is yours. Providers of this service are responsible for the accuracy of the information they provide but not for any decision you make based on it.
The tips and information you receive from your friends and family can also be called guidance. It’s simply gathering information that could enable you to make the right decision. At HL we’ll give you financial information and education to help you make informed decisions. This might be through articles, guides, tools and calculators.
Advice on the other hand involves speaking to a qualified and regulated Financial Adviser. This adviser will recommend a specific product or course of action for you to take given your circumstances and financial goals. This will be personal to you, based on information you provide. Providers of this service are responsible and liable for the accuracy, quality and suitability of the recommendation that they make, and you are protected by law.
Which is why at HL we highly recommend that if you're not sure what’s right for you, please request advice, for example from our financial advisers.
How much do I need to pay for guidance and advice?
Guidance is typically a free service unless your provider tells you otherwise. When it comes to your pension you need to make sure you understand all your options and check that what you plan to do is right for your circumstances. Usually, the first step is getting guidance from the impartial government website like Pension Wise. This free service is designed for everyone aged 50 or over, who has a UK-based personal or workplace pension.
Most pension providers these days also share a lot of free information on their website that everyone can access, or you can call them to seek further guidance.
Advice on the other hand is a fee-based service and is different to financial guidance, where only general information is provided. The charges will be disclosed before you are asked to commit yourself.
Why should I pay for advice?
When it comes to financial advice you get what you pay for. For some decisions, such as planning your retirement, the decisions you make are very important and you may want peace of mind to know that your money is in the best possible place to meet your future plans and goals. In fact, working with a qualified professional to develop a comprehensive financial plan, bespoke to your circumstances is one of the biggest reasons people choose to take advice.
Financial advisers can often save you money by looking at charges on existing investments and helping you to invest tax efficiently.
Why should I choose HL to get financial advice?
HL is a financially secure, FTSE-listed company with over 40 years of experience enabling people to save and invest with confidence. We’re awarded Corporate Chartered status by the Chartered Insurance Institute (CII) and we demonstrate continued commitment to excellence.
If you think you could benefit from getting expert financial advice from a professional, get in touch with our advisory team today.
You won't get personal advice on the call, but they'll talk you through the advice service we offer, including charges and put you in touch with an adviser if you'd like to go ahead.
Our advisers can recommend how you can make the most of your tax allowances through financial planning. But if you need complex tax calculations, your advisor might recommend you speak to an accountant to complement their advice.
