This week, Balance: Wealth Planning celebrates 10 years of building financial futures for our clients. We look at some of the changes that have happened over this time and the difference a decade can make to your financial planning. Research shows that on average people can enjoy a £48,000 increase on their assets by taking financial advice.
Changes to the financial planning industry
In 2015, pension legislation changed to enable people aged 55 and over to access their private pensions. Known as the ‘pension freedoms’, the relaxed rules allowed people to enjoy a tax-free withdrawal for the first 25%. This new flexible savings approach was a financial planning game changer, as it created more ways for people to use their pension income. However, it also presented the challenge of retaining enough cash for retirement.
Another big change in financial services over the past decade is the increased use of technology in advice. Sophisticated cash-flow planning tools allow people to see a realistic financial forecast of their present and future income. Such tools have enabled people to get a clearer picture of ‘what if’ scenarios that might occur during their lifetime.
The past decade has also witnessed a series of socio-political events, which have had a direct impact on financial planning advice. From Brexit to the cost-of living crisis, the pandemic, Ukraine crisis, and changes in government, such events have affected the UK’s economic growth. Inflation has been at an all-time high, along with high interest rates that have impacted middle earners for the first time in half a century.
Due to a change in consumer attitudes, ethical or ESG (environmental, social and governance) investing has also gained more popularity over recent years. This is an area we have explored as a firm, and we have a Good Practice portfolio available for our clients.
Long-term financial planning strategy
Taking a long-term approach to your financial planning can reap many benefits and value. According to an International Longevity Centre (ILC) report, people who received financial advice over 10 years saw an asset increase by nearly £48,000 on average. This research suggests that the combined benefits of financial advice work out as 2,400% greater than initial fees.
The ILC study compared savings, pensions and investments between those who received advice with those who didn’t across two wealth levels. This included an ‘Affluent’ group, who felt comfortably well off, and ‘Just getting by’, whose income is roughly the same as their outgoings.
An interesting find was the fact that the ‘Just getting by’ group appeared to benefit the most from financial advice. Savers within this group saw their pensions rise by 24% over a 10-year period as a result of following financial advice. Furthermore, the ILC research showed the ‘Just getting by’ group were £50,332 better off and the ‘Affluent’ group were £43,353 richer.
We believe that financial planning is not just for the very wealthy. Our clients span a range of income levels, including middle earners who may have been impacted by recent tax hikes. By exploring tax-efficient ways to organise their savings, investments and pensions, we’ve successfully helped many of our clients achieve a higher level of wealth
How to build your legacy
When you’re planning a long-term savings strategy, the amount you will accumulate will depend on your savings, pension pot and investment portfolio. The earlier you focus on wealth planning, the more options you’ll have in life. By paying into a private pension over a 40-year period, you can build up a good-sized pension pot. The compound growth of interest earned on savings and investments enables wealth to rise over the longer term.
However, it’s common for people to reach middle age before they even consider their financial future. Fewer years means less time to earn enough income to boost existing savings. It’s also important to have a financial plan so you can set some clear objectives. When we know what we’re working towards, we have a greater chance of achieving our aims.
Before our clients embark on a financial planning strategy, our team will look at the following:
- What is your ‘why’? We will ask you to reflect on your aims and aspirations for your present lifestyle and future retirement.
- Do you have enough to live well today and tomorrow? Our advice includes helping you manage your income and spending.
- How can we make your money more tax-efficient? Whether it’s through effective tax planning or tax wrappers, we will look at how to get the most out of your savings.
- What’s your preferred level of risk? Our aim is to help you build your wealth through sensible investing with protection from unnecessary risks.
- How well is your wealth protected? We’ll make sure you have the right type of insurance and adequate policies in place to protect your family should the worst happen.
Balance: Wealth Planning
This year, Balance: Wealth Planning is celebrating 10 years of providing financial planning to our clients. Over the past decade, we’ve won an accolade of awards, including being selected as one of the Top 100 Adviser firms in the UK. We also have a series of highly rated accreditations including the Pension Transfer Gold Standard.
In 2024, we won Money Marketing’s Best Retirement Advice Firm, which recognises excellence in retirement advice. We also won Next Generation Advice Firm, which recognises innovative approaches to financial planning through technology, modern business practices, and a client-centric approach.
Our financial planning team have also trained with the Kinder Institute of Life Planning, which focuses on people’s personal goals, values and priorities. Using our expertise and different methods, we’ll ensure you have enough money to live your current lifestyle and to achieve your future goals.
Client testimonial
“Rebecca carried out a comprehensive analysis of our finances. She assessed our position on financial risk and then carried out a stress tests to determine the impact of significant events on our income and investments. This analysis is completed and discussed at review meetings twice yearly. Overall Rebecca provides great clarity of our current financial status and provides us with an assessment of what to expect in the future. Rebecca presents all this with clarity and importantly provides us with great confidence and reassurance that we are in safe hands”.
Sources:
https://www.unbiased.co.uk/discover/personal-finance/savings-investing/the-value-of-financial-advice-how-much-is-it-actually-worth
https://ilcuk.org.uk/wp-content/uploads/2018/10/ILC-UK-The-Value-of-Financial-Advice.pdf
https://www.morganstanley.com/Themes/how-to-plan-your-financial-future
https://www.nerdwallet.com/article/investing/what-is-a-financial-plan
