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By Balance team, Sep 18 2017 09:02AM

If you’re a business owner or leader, no doubt you will now be back in the swing of things business-wise. September can be a good time to assess where you are with your business and to set goals for the rest of the financial year and for the future.


Earlier this year, we wrote an article on personal goal setting to help you focus on your future objectives, especially when it comes to retirement planning. The same applies when you run your own business. Do you have a 5 or 10-year plan? Do you have an exit strategy? Do you plan to sell your business in the future? We have put together a step-by-step guide below aimed at business owners to help you assess whether your business objectives are aligned with your personal objectives.


1. Why is it important to align your business and personal goals?

When you run your own business, it has a significant impact on your personal life, especially in the early days. Most business owners work very long hours to achieve their targets. When a business gets to a certain stage, you may be able to take on employees to help you manage day-to-day operations and/or expand. At this stage, it is important to take time out and reflect on your business to understand the following:


a. Why did you create your business in the first place?

b. Does your business run in the way you intended it to?

c. How does your business impact on your personal life?


If you are unhappy with any of the above points, then it’s worth carrying out a business review. For example, if you feel that your business is impacting greatly on your personal life, you may need to find extra resource to help you manage your business. You may have started your business to get a good work-life balance, but you may be unable to achieve this at present. This could have repercussions in the future, especially in relation to your retirement planning. If you work yourself into the ground, you may not be able to do the things you plan to do in the future. Therefore, your personal goals need to align with your business goals.


2. Where is your business right now?

You may be happy with the way your business is running, which is great. However, if you do have certain aspirations or personal goals, you may feel that you need to increase your profit margin, so you have enough funds to support a comfortable retirement. Consider the following questions:


a. Do you know the value of your business?

It is important to understand how much your business is worth and this should be done on an annual basis, or after a period of growth or expansion. Understanding how much your business is worth could determine your plans for the future.


b. Does the business rely on you alone?

If you’re essential to the running of your business, what happens when you’re not there? Do you have trusted people you can rely on to manage your operations? If you are aiming for a better work-life balance, so you can achieve your personal goals now or in the future, then it might be time to consider delegating some responsibilities to others. Do you have the capital to employ people or outsource certain tasks?


c. Do you have an exit strategy?

Every business needs to have an exit strategy in place. Even if you don’t plan to retire, unfortunately, none of us live forever, so you may need to write your business interests into your Will. Planning your exit strategy all depends on your long-term objectives for your business and your retirement – we explore this further below.


3. Where do you want your business to be in 5, 10 or 15 years’ time?

Depending on your age and your future plans, you may have already decided where you want your business to be in 5, 10 or 15 years. Ask yourself the following questions:


a. Do you intend on selling the business?

You might be considering expansion; scaling up your business to increase its value and make it more attractive for future sale. Therefore, a business review and correct valuation is crucial to forecast an accurate figure when you come to sell your business. Read more about selling your business.


b. Do you have someone in mind to take over the business?

You may be in the process of training an employee or a family member to take over your business in the future, so you can retire with full peace of mind. Make sure this is legally recognised and added to your Will, should the worst happen.


c. Are you deliberately scaling down your business?

You may be in the process of downsizing your business, so you can run it at a level which enables you to achieve your personal goals. This is an option for many over-55’s due to the ‘pension freedoms’ which allow people to draw from their pensions before they retire. Remember that taxes will apply to early pension benefits, so always speak to a professional for advice before drawing from your pension.


If you enjoy what you do, you may not want to retire just yet. One consideration here is to review your overheads – for example, look at the current cost of leases and rent on any commercial premises. Could you streamline your operations? By reducing your overheads, you will increase your profit margin, which will help you to create a secure financial buffer for the future.


Plan, plan, plan!

If you haven’t yet set a 5 or 10-year plan, then we strongly advise you to do so. Without a solid business plan in place, it is easy to drift and lose sight of your long-term objectives. Make sure your personal goals are always in line with your business goals to move you comfortably towards retirement. And if you don’t plan to retire, then create a secure strategy to keep your business operating for the long-term. None of us know what the future holds, so advance and effective business planning will alleviate any worries for the future.


If you would like a business review, or you would to align your business goals with your personal goals, then please get in touch to speak to one of our financial planners.



By Balance team, Sep 11 2017 10:29AM

It seems that most days there’s something happening in the news that catches our attention. From North Korean missile tests, to extreme weather patterns in the southern states of America and the Caribbean, to the ongoing uncertainty over Brexit, the list is endless. What effect do such events have on investments? We have looked at different scenarios and how they can have an impact an investment strategy.


Foreign policy and foreign exchange

The foreign exchange market is the largest active financial market in the world. In today’s globalised economy a political event like an election or a shift in foreign policy can have a significant impact on exchange rates around the world. For example, immediately after the EU referendum vote result last year, the pound plunged against the Euro as fears amounted over the UK’s ability to prosper as an independent nation. Whilst some economists predict that the pound will eventually return to pre-referendum levels, others think that we are trending towards parity; which would mean 1 pound to 1 Euro. In the current situation, a weaker pound can actually be beneficial for some UK businesses, like exporters and manufacturers, as their goods are more attractive overseas to foreign buyers who have more buying power with their stronger currency. Conversely, this obviously means that it’s now more expensive for UK firms to import Euro denominated goods.


Usually, the level of confidence in a country’s governing system has a direct effect on financial markets, as well as how traders view an isolated event of instability or potential change, like an election or a referendum on a key issue. A incoming government’s new ideas might have implications for businesses in terms of their tax treatment and rules and regulations relating to the industries they operate in. These in turn could have an impact on company share prices. That said, there are many other factors and variables to consider including the relationships between businesses, suppliers and customers - both inside and outside of the country.


President Trump and North Korea

The current hostilities between the USA and North Korea amount to a crisis the world has not witnessed for quite some time. When President Trump issued a warning to the North Korean leader, Kim Jong-un, this had an instant effect on the financial markets. The price of gold rose to its highest level for the past two months. This is significant as it is often viewed as a defensive investment or a ‘safe haven’ when markets are volatile. In the currency markets the Swiss franc also strengthened against the US dollar as this currency is seen as a safer option due to Switzerland’s political neutrality and its robust banking system.


The price of war

When North Korea responded to President Trump threatening a nuclear strike, the main Asian and European indices dropped. This included the Nikkei index in Japan, a country directly affected by North Koreas displays of aggression. Due to the globalised nature of economics and politics, such international disputes and events have a domino effect across financial markets.


The cost of bad weather

The 2017 hurricane season is currently wreaking havoc across the Caribbean and Southern states of North America. Lives have been lost, and homes and businesses destroyed. Damage to factories, distribution centres and transport links has a direct effect on the supply chain and infrastructure of a country’s economy. The damage caused in Houston, and now the Caribbean Islands, is already amounting to billions. Houston is responsible for one fifth of oil production for the US, as well as half of the country’s oil refining capacity. Experts estimate that Hurricane Harvey is set to be one of the costliest natural disasters in US history, with the final bill expected to be as much as $40-50bn (£30-£38bn).


Diversify, always spread your level of risk

As we’ve explained, politics and natural disasters can have a dramatic effect on financial markets. Therefore, a sound investment strategy is essential in order weather any market conditions. No strategy is guaranteed but the most sensible approach is to spread your level of risk by diversifying your investments across asset classes. A portfolio containing a wide variety of investments is more likely to be less volatile and create steadier returns. With stock market valuations also at historical high levels, it’s also worth considering drip feeding investments in steadily over a period of time. This increases the likelihood of a smoother entry into your investments.


If you would like to review your investment strategy or just want ensure that your money is working for you in the best and safest way, please get in touch with us to speak to one of our financial planners.




By Balance team, Aug 29 2017 07:44AM

When it comes to planning for your retirement, everyone is different. We all have individual dreams and goals - therefore, a retirement plan for you will differ from somebody else. Ultimately, you need to tailor your retirement plan to how you wish to live your life as you grow older. We have written various articles on retirement and goal setting, so we have compiled a simple 3-point checklist for you to consider below:


1. Do you have a goal, plan or simply a vision of how you would like to live when you retire?


Most of us daydream about what it would be like when we stop working, or where money is no object to living your life exactly how you choose. It’s important to align your retirement plans with your spouse or partner and, obviously, if you have any dependants who may require your ongoing support (i.e. carer responsibilities). Some people create a ‘mood’ or ‘vision’ board comprising of the things they want to do or achieve. Or, you could simply write a list. Often known as a ‘bucket list’, this could include learning, training, activities, as well as travel and relocation.


For example, there are an increasing number of people aged 60+ who return to education to gain a degree or retrain in an area they enjoy. Recent reports in the media have shown that the over-50s are now the new ‘business start-up’ generation. This age group are leaving long-term careers to start their own businesses in the areas they enjoy. Recent pension freedoms, allowing access to funds and benefits from the age of 55, can provide a financial buffer for those wishing to create new business ventures later on in life. For many people these days, life begins at 60, which means there are an infinite number of opportunities for you to follow your own interests, whether it’s for business or leisure.


2. Do you know the total value of your pension, savings, investments or other assets, such as property?


Once you have created a vision or list exploring how you would like to live when you retire, the next step is to check whether you can actually achieve your goals. You may have money tied up in various places – pensions, savings accounts, ISAs, investments, and you may have some business interests too. It’s worthwhile gaining an accurate valuation of all your assets, especially the value of your pension, so you can begin to plan for your future. Ideally, you should be aiming for financial freedom as early as you can, so you can enjoy your life to the full. Read our recent guide to trusts and estate planning for helpful advice or speak to one of our financial planners.


3. Do you know how much you will need as a baseline for a comfortable retirement?


This all depends on your goals. Consumer association, Which, suggests that retired couples currently spend around £26,000 per year to live comfortably – i.e. spending around £4.5k on holidays and around £3.9k on groceries. However, to enjoy a luxurious retirement, Which suggests that retired couples are spending around £39,000 per year – i.e. £11.8k on holidays and, interestingly the same amount on groceries (£3.9k) – see the full Which article for the full breakdown.


Whether you are currently living a comfortable or luxurious lifestyle, to continue in this vein when you retire, you will need to take into consideration future interest rates, inflation and other potential economic downturns that could affect the price of goods and the cost of living. Seek professional financial planning advice if you are trying to assess how much you are likely to need when you retire.


“I see retirement as just another of these reinventions, another chance

to do new things and be a new version of myself.”

Walt Mossberg


Read our Guide to Retirement on our Big Life Events page.


If you need advice when it comes to planning for your retirement, please get in touch to speak to one of our financial planners.

By Balance team, Aug 21 2017 01:07PM

If you’re starting to feel that you’ve spent too much this summer, it’s probably a good time to take a look at your savings strategy. However, with so many savings options available, where do you start? This week, we give you the lowdown on various ways you can save – read on…


“The way to build your savings is by spending less each month.”

Suze Orman


Simple, right? Yes and no... It is pretty obvious to most that spending less will increase your savings. And yet, we all have outgoings, such as mortgages to pay and a lifestyle to lead. Before we look at ways to save, here are three top tips for checking your spend:


1. Check your bank accounts for any direct debits you might’ve forgotten about – for example, old magazines or online services, etc. Get rid of any unwanted outgoings.

2. Check your credit card statements and pay off any debt – there’s no point in paying high interest costs on outstanding amounts. This money could be going into savings.

3. Check whether you are better off overpaying your mortgage to off-set any interest. For example - if your mortgage rate is higher than the savings rate, overpaying your mortgage could be a sensible financial decision. However, penalties may apply, so always seek professional mortgage advice.


Now let’s look at the different accounts and financial products out there, which can help you make the most of your money…


Savings accounts

Do you have various bank accounts? Do you have a lot of money sitting in a current account rather than a savings account? Do you know the interest rates for all your accounts? High street banks tend to have lower interest rates, so it may be wise to switch to a specific account offering a higher interest rate.


For example, a Fixed-Rate Savings Account will guarantee you a rate of interest for a set period of time. Unfortunately, this also means your cash will be locked away until the stated time, which may or may not be helpful. But, if you are happy to save in this way, interest rates for a Fixed-Rate Savings Account can be as high as 2.2%, but this rate would mean locking your money away for 3 years.


If you are happy to stick to rigid terms and conditions, you could consider a Regular Savings Account. This type of account has a high rate of interest, possibly as much as 5%. However, you will be expected to pay money into this account every month, you may have a limit on withdrawals, and there may be other conditions that apply too – carefully check any terms.


Tax-free ISAs

ISAs are still a very sensible tax-free way to save. The ISA limit for this tax year (2017/2018) is £20,000. The main advantage of an ISA is the fact you don’t pay tax on any interest on your savings. There are Cash ISAs, Stocks and Shares ISAs, Help to Buy ISAs and, if you’re under the age of 40, the Lifetime ISA. The government incentivises people to save in ISAs by offering bonuses – for example, a 25% bonus is added by the government for a Lifetime ISA. See our detailed blog on ISAs for more information on the different types and benefits.


Pension check

Your pension should form part of your long-term savings strategy. Usually, you will be sent an annual statement: check the level of income matches the lifestyle you want to lead in the future. Recent pension freedoms have enabled people to access their pension at the age of 55; this can be both useful and risky. If you need help understanding your pension, talk to one of our financial planners who can review this for you.


Consider investing

If you do have various pots of money sitting in different accounts, you could look at investing your savings. There are hundreds of investment options out there: the main aim is to make your money work for you rather than stagnating due to low interest rates. You will need to decide your level of risk and the type of investment you would like to make, i.e. stocks and shares, trusts, bonds, etc. For more information, see our A-Z of Investment blogs.


Investing is a very complex area and can be very time-consuming. However, you could potentially reap great returns. We always suggest spreading your risk and choosing multiple fund options – this is known as ‘diversifying’. Talk to one of our financial planners for advice on investments.


“Why not invest your assets in the companies you really like? As Mae West said,

'Too much of a good thing can be wonderful'.”

Warren Buffett


Ultimately, the earlier you start on your savings journey, the more rewarding your destination will be later on in life. Whether you’re aiming for a comfortable retirement or you’re planning an extended luxury cruise, making the most of your money early on will help you to enjoy financial freedom. What’s more, an ongoing solid savings strategy will allow you to live your life to the full in the present, and not just the future…


If you are looking for a sensible savings strategy, please get in touch to speak with one of our financial planners. Our team will be more than happy to carry out a review of your existing savings to see where we can add value for you.




By Balance team, Aug 16 2017 07:24AM

Estate planning affects everyone. If you want your children or loved ones to inherit from you, the more planning you do now, the more likely your legacy will go to the right people. A combined approach using Wills and Trusts will enable you to plan effectively for the future. In this article, we focus on Trusts and Estate planning:


What’s included in your ‘estate’?

Everyone has an ‘estate’ and this is made up of ‘assets’, which include:


• Your home – and any other property you own including buy-to-lets and foreign property, such as apartments and villas.

• Your money - this includes money in bank accounts, savings and investments, as well as any life policies or pension benefits you may be receiving.

• Your possessions – this is where it can get complicated because everything you possess worth any value needs to be taken into consideration. For example - cars, boats, jewellery, paintings, ornaments, crystal glassware, ceramics, camera or video equipment, designer clothing and shoes – the list is endless!

• Your business interests – again, this can prove very complex if you have shares in a company or you own business property. Always speak to an expert to assess the value of your business interests.


How do I value my estate?

To protect your children from facing a huge Inheritance Tax bill, it is really important to have your estate valued. If your estate is worth more than £325,000 (Nil Band Rate), Inheritance Tax will be owed at 40%. Inheritance Tax will not be owed if your assets are passed between a married couple. Before you consider writing a Will, you need to understand what you own and how much it’s all worth. Once you understand the true value of your estate, you will be able to start planning to protect your assets – for example, by using a Trust. For accurate estate valuations, please contact our team for more information.


So, what’s a ‘Trust’?

There are several types of Trust available and it is important to choose the right Trust for your situation. In simple terms, Trusts allow you to secure and control your assets until a chosen time in the future – for example, after you pass away, to enable your children to inherit from you. Having a Trust in place can protect your estate from possible threats such as care fees and inheritance tax, and there can be certain tax benefits too.


• Asset Protection Trusts or Lifetime Trusts - you can place assets valued up to the Nil Band Rate (which is £650,000 for married couples) into this type of Trust. The benefits include protection against Inheritance Tax, care home fees, debt and insolvency, ensuring your assets are passed to the people you choose. Lengthy delays relating to probate, as well as costs, can also be avoided. You could be named as a Trustee, but you would need to also appoint another Trustee (someone you can, quite literally, trust implicitly!). An Asset Protection Trust also allows you to control how your assets are left, i.e. you may wish your children to have a share in your family home, but you could have a partner living at the property and you may not wish them to feel at risk of the property being sold while they’re living there.


• Family Protection Trust – similar to the above, this type of Trust protects your estate by ensuring it is passed onto the people you choose, avoiding disinheritance issues, reducing Inheritance Tax, helping to protect against care home fees and to reduce probate costs. You can benefit from your assets while you are alive, and then when you pass away, your assets will pass to the people you choose.


• Property Protection Trust – this protects your share in your property, i.e. your family home, so it can be inherited by your chosen ‘beneficiaries’, i.e. your children, partner, friends, and so on. The reason why this is so important is because most couples (married or civil partners) own their homes as ‘joint tenants’. This means that both people own all of the property rather than 50:50. This can make things very complicated should one person die and the deceased person intended the property to be passed to someone else. Usually, this becomes an issue when couples separate and remarry, and the family home is then passed on to the new spouse and their family. Alternatively, you may be ‘tenants-in-common’, equally owning a property, i.e. a shared buy-to-let. This poses a risk when one half of the property could then pass to someone written into a Will without the other person even being aware. See our recent blog on disinheritance for more details on this.


For more information on Trusts, Estate Planning, Wills and Inheritance, please refer to our previous blogs or visit our Inheritance page.


If you would like to find out more about Trusts and Estate Planning, please get in touch to speak to one of our financial planners.



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