Making contingency plans for the unexpected is an essential part of wealth management. However, this aspect of financial planning should not be confined simply to strategising for the possibility of inflation, volatility, currency exchange movement and other macro factors; it should also account for personal factors. For example, how might your circumstances and goals change over time and are your retirement financial plans flexible enough to respond to these changes?
Examples of changes in personal circumstance include long-term care and medical costs, or large one-off capital expenses. And another important question, albeit loaded, is that of divorce.
There is good reason to address this question; 2017 data from the Office for National Statistics reveals that despite overall divorce rates for opposite-sex couples being at their lowest level since 1973, divorce among older people is actually rising.*
In a world where our financial stability impacts almost every aspect of our daily lives, it is more important than ever to preserve what we have worked so hard to achieve. Unless you're lucky enough to win the lottery, most of us have worked hard and for a very long time to achieve financial security and the lifestyle we want for ourselves and our families in retirement.
We all remember Robert Maxwell and the Mirror Group pension scandal in the early 90s when innocent working people woke up to the horror that their pension contributions had been used to subsidise his failing empire. The same happened when "Sir" Philip Green sold BHS for £1 in 2015, and this confirmed that even some of the biggest household names cannot be trusted with our retirement funds and financial future.
Effective wealth management is about many things but it can perhaps be boiled down to two essential elements: protection and (or) growth.
Whether you prefer to emphasise protection or growth will depend largely on your circumstances, goals, and attitude to risk. One part of this is determining whether you want your investments to create the security of income or the flexibility and reinvestment potential of a lump sum.
Investors are typically split around 50-50 on this question, which is why it is no surprise to learn of a recent Aegon survey of 1,300 investors which found that 58% preferred insurance plans to pay monthly income rather than a lump sum at maturity.
If you’re considering wealth management but are entirely new to the process, you likely have some assumptions and perhaps concerns about what working with a financial adviser is like. Numerous myths and misconceptions surround the financial advice service, some of which can deter those who are new to the process. In this blog, we’ll dispel […]
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