With the economic uncertainty presented by Brexit, it has become challenging for most people to preserve and grow their wealth. The low-interest rates, as well as the unstable markets make it hard for them to risk their hard-earned money. On the contrary, changes in pension freedom and inheritance tax provide new opportunities to help you grow your finances.
During these times, smart financial planning is important to achieve financial security for the years to come. We are here to give you some advice on how you can protect and grow your money the right way.
Create a plan suitable for you
You need to set your own goals and timeframe and understand your attitude towards risk. Create a strategy that is tailored to your circumstances and goals. Having an investment portfolio that fits your situation will allow you to achieve great results.
Understand your attitude for risk
Different types of investment pose varying levels of risk. Before investing, you need to understand your risk tolerance, which is needed in building your portfolio. With the help of a chartered financial planner, you can determine what level of risk you’re comfortable with. They will ask you the right questions and use the appropriate tools to build your risk profile. Based on your profile, they can match investments that they think will work for you.
Set a timeline
Your investments should align to a specific purpose, like a life event or future payments. They have to be plotted to a timeline, specifying how much money is needed and when it is needed. Creating a timeframe can help you figure out how aggressively you want to invest. Defining each goal you want to achieve helps you guide your investment strategy.
Have diversified investments
Take note that the higher the concentration in one particular investment, the higher the risk it entails. One way to reduce the risk is through diversification. Diversification of investments is a strategy that minimises risk by allocating investments among various financial instruments and industries. It aims to increase returns by putting your money in different areas.
Effective tax planning
When setting up your portfolio, you should consider tax planning to increase your real returns and preserve your wealth for the future. Find arrangements that can keep your capital from tax while giving you a tax-efficient income. This will allow you to hand over your wealth to your beneficiaries with minimal bureaucracy and inheritance taxes.
Review your strategy regularly
It is important to remember that our circumstances, goals and requirements are bound to change. It may be because of major life events like relocation, marriage or retirement. External influences like changes in legislation or tax rules may prompt you to modify your strategy.
Having said this, you need to review your financial planning at least once a year. This will keep you informed of any significant changes that may affect the effectiveness or suitability of your portfolio. With the current political uncertainty, regular reviews are critical to help manage risk and encourage the progress on your portfolio performance.
If you need personalised, expert advice from a regulated adviser, Stadden Forbes is your best choice. We are one of the best wealth management firms in London that help clients navigate the complex world of financial planning. Our team of pension and wealth advisers is committed to helping you understand and plan your financial future. Call us on 020 3405 5320 or send us an email at info@nullstaddenforbes.com for more information about our services.
