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DON'T PANIC

As Corporal Jones in Dad's Army used to scream "Don't Panic"

During turbulent times like these some investors run for the hills and try and find a safe haven for their investments. However we believe that this course of action is not necessarily the best. With this in mind we have given a short summary of our thoughts below.

"Sharp market declines are understandably unsettling for all investors and we want to assure you; as your advisors; we are monitoring the situation closely.

Stock markets go through periods of uncertainty and can tempt clients to amend their long term objectives usually crystallising a loss. Stock market volatility does tend to be short lived; therefore most experts agree that investors are better off remaining invested during these unnerving periods.

Sharp market falls are more often than not followed by large gains and vice versa, so an investor who attempts to anticipate the troughs and peaks can be caught out. This can have a huge impact on long term returns.

Missing the best days in the market can dramatically affect your returns, one study has revealed that over the last 15 years, by missing the best 40 days you can impact your return negatively by in excess of 10%. Which when banks are offering next to nothing in interest is quite considerable.

Our sentiment for now is to remain invested and should you have any questions please do not hesitate to contact us. We will be happy to review your current financial situation, your financial goals and assist with future strategies to achieve those goals."

3 quick tips when choosing a CASH ISA

With the end of the tax year upon us and the £10,200 ISA allowance disappearing we give you some quick tips on choosing the best cash ISA for those of you that want to take advantage of this low risk tax free product.

Cash ISAs are simply cash accounts which earn the tax benefits of the ISA wrapper and are therefore amongst the most straightforward products in the financial market. The capital in a deposit account will not grow, but the value will not go down and will earn interest for the entire time it is invested. Therefore, in order to find the best one, you would generally just need to look for the highest interest rate.

However, there are some differences to be aware of so we thought we’d put this little blog together to help you choose the right one for you.

What really is lifestyle financial planning?

Lifestyle financial planning is the new buzz word in financial services but what is it, and more importantly will it benefit you?

I started in financial services in the late 1980's, coincidentally just about the same time as the 'fact find' was introduced into the financial advice process. The purpose of the fact find was simple. Get to know the client so you can establish what their needs were and then recommend the right product(s) to meet those needs. In cold hearted sales terms some would call it 'find the gap, and fill it.'

Now don't misunderstand me. I'm not knocking the fact find. Apparently, compared to the sales processes that the old fashioned insurance salesmen were using prior to this, the fact find was a giant leap in 'customer focused' advice.

So, how come 20 years later the fact find is regarded as a neanderthal like method of financial planning to the new breed of lifestyle financial planners appearing on the block? Well, the answer lies in the title itself. The fact find was all about gathering facts. How much this? how much is that? etc Yet we all know that people make decisions on emotions first and then try and justify it with facts later, right?

Lifestyle financial planning, therefore, tries to dig deeper by asking the BIG questions. While it’s natural to think about wealth in mental accounting terms, in reality it’s far from a neat and logical process. Lifestyle financial planning is about helping you to move beyond the traditional notions of wealth— such as assets, net worth, and business valuation— toward genuine prosperity, which is defined as a state of well being when resources are aligned with a sense of self and life. Some call it 'marrying your money to your meaning'.

The lifestyle financial planner therefore will ask more challenging questions. Questions such as 'what's most important to you'? what are your value's? what does money mean to you? The idea being that the lifestyle financial planner is attempting to help YOU establish YOUR goals and needs, rather than find a gap and recommend a product to fill it. Infact, lifestyle financial planning will normally go through 2 stages even before any financial advice is given.

The first stage - life planning - focuses on getting to know you, helping you to identify what's important, and understanding the things you want to achieve in your lifetime, particularly the sort of lifestyle you want to enjoy now and throughout life. These are known as 'soft facts'.

Next comes financial planning where, similair to the old style fact finding process, all your 'hard facts' are now gathered. However, another thing a lifestyle financial planner will do that a traditional financial adviser won't is create something called a lifetime cashflow forecast. Usually this is done with the aid of sophisticated financial planning software. The benefit being that it produces a dramatic picture of your financial future based on the way you are handling your finances today. Our experience when working this way has been that clients, when shown their lifetime cash flow forecast, suddenly understand it and thus feel more empowered to make the right decisions about what to do with their finances to help them achieve their desired results. For some, it may be that they can book 5 star holidays instead of 3, for others it may be that they seriously need to embark on a savings or wealth creation program to give them any chance of achieving what they want.

Finally, the 3rd stage is financial advice. This is where recommendations are made to allocate the right amounts of money to the right places to be available at the right time with, hopefully, the right results. It's the 'under the bonnet' stuff where the engine is tinkered with to get more miles for your money!

Finally, and another key differentiator to the old fashioned insurance salesman, a lifestyle financial planner will incorporate a review strategy to monitor the progress of your lifestyle financial plan to it's goals. One thing you can guarantee is that your life will change, as will your plans. So a good plan should be able to adapt to these changes in the same way that a captain of a ship is constantly readjusting the wheel to stay on course whilst the wind, sea and currents of life are often working against him. By having regular meetings at pre-agreed stages in your financial life plan both you and your adviser are able to assess what changes can be made to stay on course.

So will it beneift you? Well if you want to see how the reality of your financial future lines up with the ideal image in your mind then yes. Likewise, if you want to establish what really is important to you and then use your finances in a way that lines up with those vales then yes. However, if you believe that financial advice has no long term value, should be free and/or purely based on the buying of financial products then probably no. However, don't worry too much as there are still lots of insurance salesman out there willing to help!

Ideal FInancial Management Limited - it's not about your money;it's about your life.

For a discussion on how to create your own lifestyle financial plan email us or call Brian on 01302 880140

Government to scrap 'anti age discrimination' rule - yeah right!

The news this morning was talking about the announcement that the State Pension Age d skeletonworkingwhitebackgro efault retirement age has been scrapped and that employers will no longer be able to force staff to retire at 65.

I read with a smile too (or should I say smirk) that the Lib Dem minister Ed Davey is expected to talk about how ‘older workers have a lot to offer in the workplace and we need to get rid of this outdated form of age discrimination.’

What a load of tosh (not the older workers having something valuable to offer may I add). There’s only one reason why this ‘outdated form of age discrimination’ term is being used and that’s the government can’t afford to pay the state pension from age 65.

What makes a winner?

I went to the Chamber Business Awards last night and witnessed some well deserving people receive recognition for their hard work over the last 12 months. gingerbreadman

It was great to see the enthusiasm and passion some people have for their business - although the drink may have added to the occasion a little bit too me thinks ;-)

It did, however, lead me to thinking 'what is it that makes a winner'? Why are some people turning their work into a passion and some just do it 'to make a living'? Well I believe it boils down to your internal value's. If you believe that what you are doing is your valuable contribution to society and you genuinely want to provide a solution to your customers problems then you will automatically have more energy to get out of bed in the morning. Alternatively, if you see you're business or profession as having no real significance then the desire to produce credible work will diminish.