The Key Steps to Financial Planning
As a B&C Financial Planning Wealth Management client, you can rest assured that we will have a clear understanding of what you want to achieve in the coming years, supported by a professional financial plan that is under constant review to ensure it remains fit for purpose.
Our financial planning services are much more than just assisting you to invest your money. It is about creating a living financial plan backed by the right investment portfolio to ensure that you are not left on the sideline whilst others around you fulfil their dreams.
With a deep and thorough understanding of our client’s future goals, we are equipped to build a bespoke financial plan which serves as the route map to having the means to fulfil your ambitions.
Getting to know you – The Planning Meeting
Before we are able to provide you with any advice, it is essential that we get to know you. To do this we will ask you a range of questions to help understand what your goals and aspirations are. Once we have a clear picture of what you want to achieve, we will need to know what financial resources you have set aside to achieve these goals.
At this stage we will also ask you to complete a short questionnaire to help us assess not only your willingness to take risk, but your capacity to accept it. We will then discuss the outcomes from this questionnaire with you in significant detail to ensure that you have a clear picture of the possible investment returns that you could expect as a result of your decision.
With a clear understanding of your goals and aspirations, your current financial circumstances and the level of risk that you are comfortable with, we will then help you prioritise your goals into the following durations:
- Short Term – 6 to 24 months
- Medium Term – 2 to 5 years
- Long Term – 5-10 years
With your financial timeline in place we will help you arrange your finances to optimise your ability to achieve these goals with the lowest level of risk to your portfolio and future standard of living.
As individuals, we all have aspirations and goals that we would like to achieve throughout our lifetimes. So why is it that so many people leave the realisation of these aspirations to chance?
As Benjamin Franklin, one of America’s founding fathers once said ‘if you fail to plan, you are in fact planning to fail’ so why is it that many of us spend so little time actually planning our own personal future? After all, we only live once.
It is easy to accept that putting money aside on a regular basis is a good starting point, but understanding how much money you need to save and how much risk you need (or are prepared) to take with your hard-earned savings is far more difficult.
Protecting your investment plan
With a carefully constructed plan in place, what risks are there to that plan and therefore fulfilling your ambitions?
Modern-day life is rarely a smooth progression with a twist and turns to have the potential to derail the planning put in place. Whilst no one can claim to cover all eventualities, we always consider the principal risks to clients and their family along life’s highway.
The main risk is to the ability to generate income and capital, which is the fuel to enable the Financial Plan. So a Financial Plan will include recommendations on how to protect against loss of income from a number of reasons (principally ill health and death) but also ensure there are adequate financial resources to complete the plan, wherever possible. All this will be covered in the context of the cash flow plan, so budgets are considered and respected.
Once the plan is drawn up and agreed, we then move to implementation which can involve many aspects, from setting up bank accounts, ISA’s reviewing existing plans and making any amendments or adjustments necessary to bring all aspects of the plan together. This will include ensuring we have information to report regularly through the review process – see below.
As independent advisers, we have the advantage of being able to look at the whole of the market and our internal due diligence processes are regularly benchmarking suitable products for our clients, to ensure that we provide the best terms available for our clients. Our Investment Committee meets regularly to review the market offerings from product providers against our strict selection criteria which include such things as the financial strength and sustainability of the business offering the product, its features and overall value for money (costs).
Your professional adviser and their experienced administrator will project manage the implementation on your behalf, enabling you to focus on your life, secure in the knowledge that a qualified, professional and capable team are managing your affairs to the agreed plan and timetable.
During implementation, we believe regular up to date communications are important to help you understand what progress is being made and what (if any) hurdles we are facing – remember the comment, life is not a smooth progression!!
Once the implementation phase is complete, you will be provided with a summary of your portfolio and details of the first review date.
Reviewing your financial plan
As is the case in all aspects of life anything is only current at its date of inception. Your investment portfolio is no different. World markets move by the second, the economic climate changes and fund managers come and go.
It therefore goes without saying that your investment portfolio can very quickly move out of line with your expected level of risk and in doing so compromise its ability to achieve your goals. We, therefore, cannot overstate the importance of the review process that we have built into our wealth management service.
Stage 1 -Update your current circumstances
We will contact you before the review meeting to obtain details of any changes in your circumstances since your plan was prepared or the last review.
Stage 2 – Review your goals
Secondly and probably most importantly the second part of the review process revolves around you. Each year when we meet we will review the performance of your portfolio and discuss the changes that have occurred in your life over the past 12 months. We will ensure that your goals remain current and make any adjustments to your investment timeline. We will also review your attitude and capacity to risk. Where appropriate we will make adjustments to your portfolio and the range of tax wrappers in which you are invested to ensure that your portfolio remains optimised to give you the required outcomes you desire.
Stage 3 Review your asset allocation
To ensure that your portfolio remains in line with your agreed level of risk and on target to achieve the expected level of return required to hit each individual goal, we ensure your asset allocation is automatically rebalanced on a regular basis. You can therefore rest assured that your portfolio will not be exposed to excessive risk that will increase your potential for short term losses or conversely become overly cautious reducing your potential for growth and jeopardizing the achievement of your goals.
Stage 4 Review your investments
As the economic climate evolves, markets move and fund management groups change, the validity of your existing investments need to be reviewed to ensure they remain fit for purpose and still warrant inclusion within your portfolio. Within our portfolio management service, our investment partners review the entire fund universe on a monthly basis and where appropriate make adjustments to your portfolio to ensure that each active and passive fund in which you are invested remains the best of breed and not only provides you with the optimum level of return, but also remains financially stable.