Three key points for successful planning

Warwickshire Life
April 2008
Download Three key points for successful planning PDF

When it comes to financial planning, your individual needs may require a bespoke solution. Broadly, though, your objectives are likely to fall into three key areas:

• Building and preserving capital
• Managing cash and borrowings
• Gaining financial protection against risk

Of course it is likely, because of changing circumstances and priorities, that you will need advice on all three areas, which is where specialist wealth management advice comes in.

Building and preserving capital will cover a number of areas such as pension planning, investments, portfolio management and trust and estate planning.

When building capital, the management of risk is critical and can be best summed up in one word – diversification – both by asset class and by investment manager.

A successful investment strategy can only be properly realised if the managers looking after the individual elements are of the highest quality, so it’s important to understand how your wealth manager selects those managers who ultimately make key investment decisions on your behalf.

In building your capital every effort should be made to take advantage of the tax-efficient vehicles available. And having built up significant assets preserving your capital for your chosen beneficiaries, how do you protect your wealth against a rising tide of taxation and HM Revenue & Customs taking a keener interest in your trust and estate planning strategies?

While many people are aware of the existence of Inheritance Tax (IHT) planning, few still do anything about their potential liability. Therefore careful IHT planning is a central plank of any wealth management strategy in order to protect wealth, ensuring the bulk of it is passed on to families and not the taxman when you die. The last thing you want is for your family to have to face a large IHT bill after you have gone.

You will, of course, need to manage your cash and borrowing requirements as part of your financial planning – so advice on mortgages, commercial banking, deposit and current accounts may be needed from a professional adviser.

The last component of the planning process is to consider financial protection against risk to your health, life, assets and – if in business – your partners and employees in order to create a cushion against the unexpected. A wealth manager can help you determine and establish both adequate levels of insurance and appropriate kinds of cover, to protect you and those who depend on you, against all the most serious risks that you face and specifically to your life and your health.

back to Press index

Thought of the week