Let’s first talk about what financial planning is not…..
- Financial Planning is not us selling you a product that you don’t need, want or understand.
- Financial Planning is not about us earning a commission – very often you will have to pay us a fee because a lot of our advice centres around plans that do not involve a financial product.
- It is not a one off transaction where we undertake some work for you and you never see us or want to see us again.
- It is not about us recommending an ISA or a pension to you just because you think that these are things that you should have.
- Financial Planning does not end when you retire at age 60, 65 or whenever.
For us, Financial Planning is about ensuring that you have enough money to live the lifestyle that you want to at the time that you want to for as long as you live. Put another way, it is about ensuring that you and your loved ones have enough money if you:
- live too long (in our case we assume that all clients are going to live until they are 99 unless there are some special circumstances)
- die too soon
- face a serious illness or catastrophe that could ruin your existing finances.
To make this work effectively, we put together an investment plan within the financial plan which will meet your goals. However, the financial plan is not just about an investment plan and the investment plan does not need to necessarily include financial products if you don’t want them (although naturally we do believe in diversification). The financial plan must also give due consideration to other factors such as tax planning, legal planning, possible change in family circumstances, setting up trusts and legacies and other factors such as changes in legislation or pension benefits.
All of these factors are taken into account together with a financial model which shows you how long your money will last given a certain level of withdrawal and other assumptions which can be amended if you don’t agree with them.
The financial plan ought to be revisited at least once a year for those that want it to take into account different changes that have been made and to ensure that you are on track.
The value of your investments can go down as well as up and you may get back less that you have invested.