Why financial advice is valuable
This content is for information purposes only and should not be taken as financial advice. Every effort has been made to ensure the information is correct and up-to-date at the time of writing. For personalised and regulated advice regarding your situation, please consult an independent financial adviser here at Castlegate in Grantham, Lincolnshire or other local offices.
Everyone can benefit from financial advice – not just those with complex, offshore assets. Yet when is the right time to work with a financial adviser, and what specific value can they offer? In this article, our financial advisers at Castlegate, Lincolnshire, explain some common scenarios where a team like ours can help. We hope you find this content insightful. If you want to discuss your own financial plan with us, please get in touch to arrange a no-obligation financial consultation, at our expense:
01476 855 585
info@casfin.co.uk
Scenario 1: Buying a home
Gathering a mortgage deposit might sound straightforward. Simply set money aside in a savings account until you reach your goal. Yet what if you could attain the target figure faster? Or, what if you could gain greater control over your mortgage costs – e.g. securing a better interest rate? A financial planner could help by constructing a dedicated portfolio which achieves more growth than simple cash. He or she could also have access to mortgage deals on the market which you could not find on your own.
Scenario 2: Growing a business
Being a business owner can present many complex financial questions. How do I maintain cash flow? How do I account for potential “disaster scenarios” like the death of a key employee? How should I invest my profits and maintain a tax-efficient business? How do I plan for a future exit and succession? A financial planner can help address each concern and tie everything together under a unified strategy and towards a common goal.
Scenario 3: Preparing for retirement
Getting ready for retirement is rarely simple. How much do you need for retirement, and are you on course to achieve it? The answers will vary from person to person, and a financial planner can use their experience, software and insight to bring clarity to your own case. Sometimes, a discussion with a professional reveals an issue that was overlooked. Or, more positively, it may reveal that you can retire sooner than you thought, perhaps with a better lifestyle.
Retirement could span 30 years of your life, or more. It is vital that decisions are taken with the best available information – to avoid regrets and costly mistakes. For instance, one little-known rule that people can fall afoul of is the Money Purchase Annual Allowance (MPAA). This states that, once triggered, an individual is no longer entitled to a maximum annual allowance of £40,000 to put into pensions each year (tax-free). Rather, the tax-free limit is reduced to £4,000 per year – which greatly restricts your ability to keep saving for retirement. This rule can be triggered, for instance, when someone starts taking money from their pension whilst continuing to work (and, therefore, continuing to contribute via their workplace pension under auto enrolment). Another potential mistake is to buy an annuity before you are ready (an irreversible purchase).
Scenario 4: Facing long-term care
Social care – whether nursing, residential or some other form – is not cheap, even if you might need it only for a short time. The average cost of a care home in 2023 is £704 per week, with nursing homes costing around £888. Over a year, therefore, the costs could quickly escalate to over £30,000. A financial planner can help you prepare for the potential cost of care, perhaps through a dedicated investment portfolio (set aside for this purpose). Another option could be using a Care Fee Annuity and using some support from the council (although this cannot be relied upon to provide the type of care that you might want).
Scenario 5: Getting your estate ready
Preparing an estate to pass down to beneficiaries can be a challenging task, especially if a complex set of assets are involved. A financial planner is useful to explain the intricacies of the tax system, how they might affect you and ideas to keep wealth “in the family” as much as possible after your death. An adviser can provide peace of mind and reassurance that your wishes will be respected, mitigating needless inheritance tax (IHT) and helping beneficiaries meet their own financial goals (e.g. using inheritance money to pay down a mortgage).
Scenario 6: Starting a portfolio
How do you invest properly? Which assets should you choose and when should you “balance” your holdings? There are 1,000s of potential funds for a UK investor to choose from, setting aside individual stocks and other asset classes (e.g. bonds). A financial planner can help you narrow down your options and build a portfolio which best reflects your goals, risk tolerance and investment timescales. A professional can also regularly review your investments to ensure the balance of assets remains on track. This helps prevent you from taking on too much/little risk and keeps your holdings appropriately diversified. This aspect of financial planning can help both new and experienced investors, providing an objective set of eyes on your strategy.
Conclusion & invitation
If you are interested in discussing your own financial plan or investment strategy with us, please get in touch to arrange a no-commitment financial consultation at our expense:
01476 855 585
info@casfin.co.uk
