How a financial planner can contribute to your wellbeing and your finances

Research from insurer Royal London has revealed that professional financial advice provides more than just practical, financial benefits. The insurer also proved that by working with a financial planner, it was possible to improve your emotional wellbeing and feel better about your money.

Helping to grow and manage your wealth is just one of the many potential benefits of financial planning. In the recent difficult climate caused by the pandemic, lots of people are feeling anxious about their finances and worrying about what the future might hold.

Here’s how financial planning expertise can help soothe your nerves and contribute to your overall wellbeing.

Set your goals and make a plan to achieve them

Financial planning starts with understanding your goals and aspirations.

In your first meeting with a planner, you’ll chat about your future plans. The conversation will be relaxed, but you should expect the planner to ask questions to tease out your financial concerns and priorities.

This initial conversation helps to build the foundations of your financial plan. Your long-term plan will evolve as life changes, but is there to give you confidence and peace of mind for your future.

Most of us find it hard to project our future income. Doing the calculations without the right experience can be near impossible.

To help you understand your financial situation, we use cashflow modelling tools. This can help give some perspective on how your plan will work and is also a useful tool to help you see how your plan is progressing.

Avoid making poor decisions that could lose you money

Part of the role of a financial planner that is often overlooked is the ability to educate and coach. This aspect of financial planning is important as it can help you avoid making poor financial decisions.

As humans have evolved, we have learned bad habits and biases, many of which we’re unaware of.

This is true of how we think about our finances too. For example, we value the near term more than the long term. We buy high and sell low and we hold on to investments that have fallen in value, hoping that we can recoup our losses.

In our role as financial coach, we help you avoid these mistakes. We are here to help you manage your investments and provide reassurance whenever it’s needed.

Because we understand the financial markets and how fluctuations may or may not affect your investments over the long term, we can make sure you don’t react the wrong way and damage your wealth.

Diversify for greater potential returns

When investing your money, it’s important to avoid putting all your eggs in one basket.

Financial planning can ensure you have a well-diversified investment portfolio to deliver the returns you desire while also reflecting your tolerance for risk.

We will carefully structure your financial plan to maximise tax efficiencies too. This is important both as you save and when you want to spend your money in retirement.

To make the most of the investments you make, it’s vital that the associated costs don’t impede the ability for your wealth to grow. This is another important area we take care of for you.

Take advantage of tax-planning expertise

To maximise the money you save, we ensure you make the most of tax reliefs and allowances.

Some suggest that this forward-thinking can boost returns. Over time, and with the help of compound growth, this can make a significant impact on your overall wealth.

Tax planning is also an important part of ensuring you pass money to your loved ones with confidence.

Sound financial planning can help you ensure your money ends up in the right hands. Using trusts, wills, and gifting strategies can give you peace of mind and confidence that your wishes are met and your loved ones are protected.

Without a plan for passing your wealth to your loved ones, up to 40% of your savings could be lost to Inheritance Tax.

Profit from forming a long-lasting relationship with your financial planner

Because we understand your objectives, as well as your tolerance for risk, we can stay alert and spot opportunities where you can benefit from new products, tax changes and better strategies to manage your long-term wealth.

Your relationship with your financial planner should be long-lasting. This allows us to establish a deep understanding of your needs and desires and we can act as your eyes and ears in the ever-changing world of tax.

If you don’t call on us for guidance, we’ll call you for an annual review to ensure your plan is on track to meet your goals and ensure it reflects any changes that might have occurred since we last met.

As the chart below illustrates, being in regular contact with your financial planner provides significant positive benefits, especially in terms of feeling in control of your finances.

Source: Royal London

How it all adds up

As well as feeling more confident about your finances and gaining valuable peace of mind, expert financial planning can also deliver “game-changing” outcomes.

A previous Royal London study, carried out by the International Longevity Centre, found that “customers who had sought financial advice were, on average, £47,000 better off than those who had taken care of things themselves.”

Considering that this research was done over the course of a decade and spanned the 2008 financial crisis, this outcome was impressive.

It also highlights the value of advice, especially in times of crisis.

Get in touch

The Bowmore team keeps up to date with all financial matters to give you the best possible advice. Our team of experienced financial planners can help make a clear plan for protecting and growing your wealth.

If you, a friend or loved one, need some guidance or reassurance about how to best look after your money and plan for the future, please get in touch. Email or call us on 01275 462 469.

Bowmore Financial Planning Ltd is authorised and regulated by the FCA.

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