The financial planning process
The first step will be to gather all the information required to prepare a financial plan. If this to include a projection of future cashflow, we will need information on your income and outgoings.
The resulting plan aims to make efficient use of your resources, in order to achieve your objectives, and identify alternative solutions. It can allow you to plan for such things as education costs, retirement, the cost of long-term care, and inheritance tax.
Your Objectives
We will spend some time talking with you to identify your financial objectives. This will include collecting information on your assets and liabilities, income and outgoings. Once all the information has been gathered, we will prepare a net asset statement, and an income statement including your tax and National Insurance contributions. We may do a cashflow analysis, to assess the feasibility of achieving your objectives.
An important part of achieving your objectives, such as funding for a child's education, or having enough income in retirement, is to achieve a certain level of return on your investments and pensions. We will discuss with you your attitude to investment risk, which we normally do using a questionnaire.
Because there is a relationship between risk and reward, the level of return that you can expect from a cautiously invested portfolio will be lower than from a more adventurous one over the medium to long term.
Tax planning
We endeavour to make sure our recommendations are as tax efficient as possible. Pensions and tax efficient investments are often ways of reducing the tax burden and increasing the amount that can be saved. The new 50% income tax rate (42.5% for dividends) from 6 April 2010 for people earning more than £150,000, together with the loss of the standard personal allowance (at a rate of £1 for every £2 above the limit) for those with income above £100,000, makes this type of planning ever more important. In addition, we consider estate planning, including ways of reducing potential inheritance taxes.
Regular reviews
Progress needs to be reviewed at regular intervals, which we will agree with you, and adjustments made as necessary.
You might like to browse our Life Stages guide, within this section, helpful in starting to consider financial matters at your stage of life.