The Importance of Financial Planning

By Huw Jones

Financial PlanningWhat’s the point of financial planning?

The vast majority of people in the UK don’t use a financial planner. You might be one of them. There are usually two reasons why people don’t use a financial planner.

Typically there are two types of people who don’t use a financial planner:

Mr & Mrs Do it Yourself  – you have already built your own plan.

Mr & Mrs Financially Disorganised – you don’t know where you are aiming for (financially speaking).

If you fall into either of these camps you may feel that you wouldn’t benefit from seeking advice from a professional, however below we look at some of the dangers you may be exposing yourself to by taking this approach.

Mr & Mrs Do It Yourself
There’s a danger that your plan is not objective, that it’s not efficient and that it’s not current.

Having an independent person assess your goals and objectives before building a plan will result in a tailored solution. Using an expert may turn out to be invaluable. We are often approached by prospective clients because they “want to sort out their pension”.

Having a comprehensive, personalised and robust financial plan will go beyond this and will ‘sort out their retirement’. Almost the same but with very different outcomes.

If you’ve built your own plan you have no way of knowing if it utilises all the rates and allowances that are applicable to you. Any products in the plan may have been acquired over a long time period and may in fact be fighting against each other.

Have you kept up with changes announced in the recent budgets and autumn Statements?

Your planner has.

Given the amount of changes in pension legislation alone, a plan constructed just a few years ago may be completely out of date.

Mr & Mrs Financially Disorganised
If you fall into this camp you may not have worked out where you want to get to. Have you ever tried booking a holiday when you don’t have any idea where you want to go? It doesn’t typically lead to great vacations.

You may feel you have been held back from creating a clear vision of your financial future by your financial disorganisation.

Lots of different pensions and investments, draws of paperwork but no way of creating order.

Using a financial Planner
A planner can help create a vision of YOUR future and utilise existing resources in the most efficient manner.

We can help you take control of your financial future and free you of the worry of not knowing whether you are on track to live the retirement you desire, on your terms and without the fear of running out of money.

There’s another benefit too.

Detailed, in depth knowledge may prove to be worth its weight in gold. Particularly when it’s backed by the Financial Ombudsman Service (FOS) and Financial Services Compensation Scheme (FSCS).

If you get it wrong you have to live with the consequences. If a planner gets it wrong you may be able to make a claim to FOS or be entitled to a FSCS payment.

” A goal without a plan is just a wish” – Antoine de Saint-Exupery