Everyone in the world knows about the financial crisis that hit us in 2008. For over three years now we have heard constant talk of “austerity measures” and people have seen job losses and pay cuts. The media is often quick to blame the bankers, and they are of coarse partly to blame. But some of this negativity has rubbed off on the financial advice business, because people don’t have a clear picture of exactly what happened.

The economic crisis can be summed up in two words – irresponsible lending. Whether it was banks lending mortgages to people who were clearly not going to pay it back, or large companies such as Leman Brothers trading on futures that they did not have the money to compensate. People were living above their means, and the financial sector was no exception.

But how does all this affect your investments, and do you need finance advice? There is no denying that the markets have tumbled across the board. But so has every other type of investment (such as property) which means that unless you had your money in cash, you will have made a steady loss. However, markets did not just fall all day every day, which is where asset management comes in. If you look at a graph of the FTSE, you will see a downward trend, but you will also see peaks and troughs. This is because markets may recover slightly before they fall. The beauty of investing in unit trusts with a discretionary manager who can give finance advice, is that they can switch your money out of the markets when they are falling, and possibly switch back in when we see a small gain. This means your asset management could, and the important word is could, trend towards over all growth, beating the markets.

Therefore, some people have done very well out of the recession through wealth management. With so much volatility in the markets, there were more opportunities for potential gains. So some people who had invested in a good financial adviser, specialising in wealth management, began to see the reward in using a professional. Since they have the time to watch the markets all the time and to ensure that they are constantly on top of sudden changes.

ISAs became very popular during the recession as people started to realise that the good times weren’t going to last forever, and they needed to have some money put aside for when things go wrong. As you are probably aware, an ISA allows you to invest at no tax cost, meaning you keep more of your money. Therefore, although the recession was a horrible and bleak time, we did learn the valuable lesson that we can’t live beyond our means, we need to save, it WILL catch up with you eventually.

It is important to note that share trading is an even quick form of investing. Share trades can be made very quickly, often many times in one day, but they are obviously very risky. For this you would normally use a stock broker rather than a financial advisor. Although they may dabble themselves, many financial advisor firms will be unwilling to give finance advice on share trading.