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Investment
Deciding how best to invest your money can be daunting.
With so many options available and so many uncertainties, how do you choose what’s right for you?
Our job is to eliminate as much of the uncertainly as possible and to work with you to identify the most appropriate way for you to achieve your financial goals.
Our Investment Process is designed with that in mind. It creates a framework for us to discuss your needs and expectations, to assess and agree your attitude to risk and then to build and manage an investment portfolio to match.
By working through a series of logical steps, you will gain a better understanding of the reasoning behind our recommendations and confidence in the resulting choice of investments.
Our recommendations will often include the most appropriate investment solutions from every asset class. These may include Equities, Fixed Interest Securities, Property-based investments, and Cash.
We also have access to find the most up-to-date rates on Deposit Savings, National Savings & Investments and Cash ISAs.
Our recommendations will be unique to you, and will always take full consideration of the level of risk you are comfortable with.
If you wish to discuss our investment process further, please call 01554 770022, or click the link below to fill out our contact form.
Retirement
Retirement planning may most often take two forms:
Those in the ‘accumulation‘ phase – saving for retirement, and then those in the ‘decumulation’ phase – turning their pension funds into a retirement income.
We can help you plan both stages, and our robust retirement planning advice may be right for you.
Pensions
At their most basic, a pension is simply a savings scheme that offers very attractive tax benefits in exchange for you agreeing not to touch the proceeds until you are older. In other words, you put your money in, that money is invested, its value (hopefully) grows and at retirement, you withdraw the proceeds and use it to pay for goods and services.
In this case, however, you cannot touch the proceeds until you are at least 55 – and, normally, at least 75% of the value it achieves must be used to provide an income for the rest of your life.
Tax benefits
The rules on pensions can change with the seasons, but some basic elements have remained constant in recent years:
• Investors receive income tax relief on their contributions into a pension scheme (up to certain limits – see below);
• The income and gains made by that fund accumulate free of additional tax while the money remains invested;
• At retirement, you can take a tax-free lump sum of up to 25% of the total fund value;
• The remainder of the fund is then used to provide an income that will be taxable at your marginal rate of income tax.
The things that have changed, however, are the contribution limits, the age at which you can retire and, to an extent, the tax relief you can receive on the contributions you make. However, now the previous Government’s changes have been implemented and the Coalition Government’s intentions have been clarified, there is a little more certainty, at least for the time being.
Annual contribution limits
This tax year (2022/23), the maximum amount you can invest into your pension, personal or occupational, is 100% of your income or £40,000, whichever is the lower.
If you are a high-earner, this limit could be as low as £4,000. For these purposes, income is defined as your UK-derived taxable earnings, including salary, dividends, interest and trading income. You will receive tax relief on the entire investment, up to that limit. However, if you try to invest more than £40,000, you will have to pay tax on the excess. This limit, incidentally, applies to the combination of both employee and, if applicable, your employer’s contributions. You can, however, carry forward up to three years unused allowance to subsequent tax years.
Lifetime allowance
The lifetime allowance applies to the total value of all private and work pensions (not state pensions) that you build up over your lifetime, including the investment growth you achieve. For 2022/23, this value is £1.073m. If your pension fund grows above this value, you will be liable to tax charges on the excess. These charges are quite onerous – 55% if the amount over the lifetime allowance is paid back to you as a lump sum and 25% if the amount over the lifetime allowance is taken as some form of income.
Therefore, if you have a large pension fund already, even if it has not yet reached the lifetime allowance, you have to consider whether there could still be some investment growth to come. For example, if your pension fund is valued at £900,000 and you have 10 years still to go, it might be time to stop contributing and find another home for your savings.
If you require independent financial advice on retirement income options, feel free to call on 01554 770022 and we can arrange a no obligation appointment.
Mortgage and Protection
A mortgage is most often the largest financial commitment we make in our lives, that’s why we believe that the most suitable option for you is to seek independent financial advice.
In doing so you will have the peace of mind that you have a great mortgage deal that fits your needs and requirements. With literally thousands of mortgages available on the market, we will use up to date technology to source you the most suitable mortgage possible. At Financial Solutions Wales we employ a customer centred approach, and recognise that each client’s personal situation is unique.
We will not use financial jargon and will put our recommendations across to our clients in a clear, concise and transparent manor. We specialise in all types of mortgages including Buy to Let, residential, bridging and equity release.
Whether you are looking to expand your property portfolio or purchasing your first home, you can rest assured that you will get quality advice as a client of Financial Solution Wales.
We also understand that protecting your mortgage against illness, accidents, unemployment or death is essential to give you peace of mind when taking out such a large financial commitment.
Our advisers will again use the most up to date technology to source you the most suitable protection from the whole of market, and will do so having undertaken detailed analysis of your needs and objectives.
We will also contact you on at pre-determined points within your mortgage term to ensure that the protection you have still fits your needs and will advise you on any new products that may have become available.
If you insure your car, washing machine and home it is vital to insure the one thing that pays for all of these – yourself! For a free one hour consultation call one of our team today on 01554 770022.
YOUR HOME MAY BE REPOSSESED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Lifestyle Financial Planning
The majority of people have no idea where they are heading financially. They will have assets, investments, and/or high levels of income, but most people have no idea what it all means, or what sort of financial future they are going to get.
Many of our clients have very little time to think about their long-term financial plan. We live busy lives, but almost all of our clients aspire to do the things we love – travel, hobbies and retirement!
Our Lifestyle Financial Planning service is about planning and using your finances to support the lifestyle you choose.
Our sophisticated planning software has been designed to help bring people face to face with the reality of what their future looks like. For some people this can be a joy, for others it can be a shock – but either way most people want to know the truth, so they can do something about it.
Working with you, we aim to deliver the number one priority for many of our clients – a clear and accurate picture of how you are going to get to a point where you never have to worry about running out of money.
Working with you, we can get real accurate information about:
• What you must do if you are to achieve your financial objectives
• How best to live life to the full, whilst still young enough to enjoy it
• The exact length of time you will be able to support your lifestyle in retirement
• The degree of risk you need to expose yourself to
• How seemingly minor changes can dramatically change your future financial picture – for the better, or worse
• Why there’s probably no room for complacency and no time to lose
By entering details of your income, outgoings, assets and liabilities, this gives us an accurate measure of your net worth and current financial situation. We then build up a picture of the life you want to enjoy in years to come.
Our software then puts the two together. It produces a dramatic picture which spells out the reality of the financial future you are creating for yourselves.
Suddenly you can see it, understand it and believe it – because it’s based solely on the information you give! The software can then model realistic “what if” scenarios that will demonstrate the different outcomes which can be created. It allows to you plan accurately for retirement, inheritance tax, educational fees, insurance, health care and more, whether they are expected or not.
Working with you, our software solves the problem by putting the focus back on you. You become the centre of attention and we will both be able to create an accurate personalised picture of what you must do in order to get what you want.
Contact us today on 01554 770022 to discuss Lifestyle Financial Planning.
Frequently Asked Questions
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How do advice firms manage investments?
Common practice is to offer one or more investment portfolios, which are designed to help you achieve your long-term aims. The first skill in doing this is to create a blend of assets that balances the need for return with your willingness to accept risk.
Why should I spend money on a financial advisor?
Most commonly, individuals seek the help of a financial advisor for retirement planning. But they can do much more than that. You can get help with college savings, work on household finances and even get out of debt with the help of a financial advisor.
I have several pensions. Can I consolidate them?
The potential benefits of consolidating your pensions won’t apply to everyone, and there may be drawbacks to moving your pension plans – particularly so for certain types of pension. It is therefore vitally important to carefully consider all aspects of your existing pensions before making a decision as to whether or not to consolidate. If you would like to discuss your particular situation, please contact us.
I am already in debt. How can I afford a financial advisor?
The help of a financial advisor may be less expensive than you might think. Depending on the help you are looking for, you could be looking at a fee only situation or commission based pricing.
Possible Risks:
Market risk, or “principal risk” is the chance that a downturn (or a bad investment) chews up your money. It’s there for both stocks and bonds — when interest rates rise, bondholders will see the market value of their paper shrink — and for most people it’s the big bugaboo.
Inflation or purchasing-power risk for most people is the “risk of avoiding risk” — the opposite end of the spectrum from market risk — the possibility that you are too conservative and your money can’t grow fast enough to keep pace with inflation.
We can help you to understand:
- Retirement Financial Planning using the wide choices availabce
- Importance of financial planning
- The value of professional advice
- Basic principles of investment and how we manage investments
- How to administer your portfolio
To find out more please call 01554 770022:
Let us start planning your financial future today
1
Establish your personal objectives
The level of risk to be taken within an investment portfolio is a key factor in determining its composition and the resulting performance over time. In order to construct appropriate risk-weighted portfolios for our clients, we use sophisticated profiling tools that helps us to quantify the level of risk you wish to employ.
2
Decide on the Asset Allocation
In very general terms, investments such as shares usually provide the best returns over the long term, but they also have a higher degree of risk. Combing different types of investment via asset allocation in a portfolio can help to even out these swings in value; especially if they are “non-correlated” i.e. their prices move independently. Several key academic studies have concluded that asset allocation is the most important determinant of a portfolio’s performance and relative risk.
3
Tax Wrapper
Minimising any tax liabilty is one of the most important factors in long-term portfolio performance. Effective tax planning is important to maximise investment returns. Once we have agreed your objectives and an appropriate asset allocation strategy we will then consider the most suitable investment tax wrapper(s) for you to invest into.
4
Fund Selection
Our aim is to identify funds that will deliver attractive risk adjusted returns and overall good value for money. We believe that it can often be worth paying slightly more in fund management charges to obtain expertise that has the potential to outperform in certain markets. We have access to industry-leading fund research tools which assist our research. Where we do not have a strong conviction that an ‘active’ manager has the likelihood to outperform the market, we look to employ ‘passive’ index trackers which help to keep the overall portfolio cost low.
5
Review
We believe that regular reviews are vital to ensure an investment portfolio remains suitable and continues to work towards meeting your objectives. We work with you to ensure your reviews occur as frrequently as you require. During your personal review we will usually agree to rebalance the portfolio to account for the changes in the recommended underlying funds and asset allocation. This discipline is essential to achieve an effective investment strategy otherwise a portfolio can quickly become inappropriate for you.