Improving Financial Wellness at the Bar

We know that we need to put in place insurance to protect both our families and us from ill-health and misfortune, and separately, that we need to start building regular retirement savings from an early age.

A major challenge for barristers aside from being time-poor is ascertaining the magnitude of insurance cover and retirement savings required to meet their personal needs, as these decisions are not guided, in the example of an employee, by the company in which they work.

As barristers are paid erratically and have to ensure they set aside money for VAT and bi-annual tax bills, cash flow planning adds further complexity to their finances.

Furthermore, as sole-traders, barristers cannot rely on other employees or a company framework to carry them through rough financial patches; rather, they are self-reliant and their current earnings and future careers are even more dependent on their own performance than an employee who can, for example, ride on the wave of a company’s good fortune.

It is for many of the reasons above that we see barristers under both workplace and additional personal stress, which can lead to some barristers experiencing severe lack of financial wellness, which is defined from the Consumer Financial Protection Bureau as:

• Having control over day-to-day, month-to-month finances;
• Having the capacity to absorb a financial shock;
• Being on track to meet your financial goals; and
• Having the financial freedom to make the choices that allow you to enjoy life.

Knowing who or where to turn to understand what one requires or simply ‘what is normal’ for someone in a similar position to you is challenging too.

Asking other barristers can unhelpfully have its own selection bias, as we are far more likely to seek out the advice of someone wealthier than we are. This can compound our anxiety as their greater wealth or higher disposable income can make our own arrangements seem inadequate.

Given the constraints on their time, we strongly believe that barristers do need to take advice. A few hours dedicated to seeking out the right adviser can save them both time and significant stress in the future. Having an adviser you can trust provides great peace of mind.

So if you accept that you do need advice, how do you go about finding someone you can trust?

Some starting considerations for choosing an adviser might be the following:

1. Ensure that your adviser is independent. A restricted or tied adviser will be limited to recommending just a handful of products which might not be exactly right for you.
2. Get a quote before any work is transacted and make sure you understand how the charges are accrued – whether as commissions, adviser charges or on time.
3. Understand the company’s resources – do they have the scale to look after you for the long term?
4. Get a reference from a fellow member of chambers or a trusted clerk.
5. Lastly, think about working with this person – you will be sharing sensitive information and working with them for a number of years. If you do not feel they have your best interests at heart, it’s unlikely to last the course.

If you would like to discuss your financial situation with me or one of our advisers, please get in touch or learn more about how we work with barristers here.