The importance of planning


Stuart Walker

Stuart Walker

Chartered Financial Planner, Associate Director


Plans are put in place to ensure things will be ‘alright’, but everyone’s definition of ‘alright’ varies depending on your personal circumstances.

Having a plan in place is an important part of our client journey where we work with clients to understand their financial and life objectives, current income levels v expenditure, existing assets and investments, family structure, attitude to investment risk along with the effects of taxation, inflation and interest rates. All of these things have an impact on a financial plan but in this case I’m going to focus on an income and expenditure review and existing assets and investments.

In our experience, most people worry about three major things when it comes to financial matters; running out of money, will my family be ok and inheritance tax. Whilst a financial plan can’t stop all those worries it can reduce the potential impact of them by building a cashflow model to demonstrate the financial impact caused by life events.

Firstly, we look at current income v current expenditure to establish if there is a shortfall between income and what expenditure a client makes to enable them to live life on their terms.

Then, if there is a shortfall, how do we plug the gaps?

This is done by reviewing existing assets and investments to create a tax efficient withdrawal strategy that plugs the gaps to help alleviate the worry of running out of money. While ensuring any withdrawal strategy takes into account the three main taxes, income tax, capital gains tax and inheritance tax, as this can have a significant impact on not only the worry of running out of money but also the desire to look after the family and reduce your potential exposure to inheritance tax.

Life however doesn’t always go to plan, so we stress test your financial plan against life events such as market corrections, legislation changes, care home fees, making gifts and death which can potentially reduce the financial impact on you and your family.

When considering making gifts people worry about needing the money back and by building this into the plan we can discuss and determine the right time to make those gifts.

It is never too early to start a plan, and you should always keep reviewing it once you have one in place but remember a goal without a plan is just a wish.