By Sam Whybrow of Lubbock Fine Wealth Management LLP
Today, more than ever, managing your assets and planning your financial future is of paramount importance – but where’s best to start?
Financial planning is a process that involves assessing what’s most important to you, given your life goals. At Lubbock Fine Wealth Management LLP, our starting point is to analyse where you want to get to by planning your finances accordingly.
Creating a work-life balance is important to most people. A key component to this is the security of knowing when financial goals can be achieved. With a variety of potential scenarios and outcomes, plotting a financial map helps clients to make the appropriate financial decisions along the way. We encourage our clients to do this through Lifetime Cash Flow Planning, a core component of our process, which helps define what’s most important to you whether that be your family, business, travel, a combination of these – or other future plans.
What is Lifetime Cash Flow Planning?
Using progressive financial planning practices we comprehensively analyse your future financial cash flow position and identify areas where you are potentially financially at risk. We present a personalised financial plan encompassing a full cash flow forecast and we ‘stress test’ how different financial decisions, assumptions about growth rates and inflation and other macroeconomic events might impact on your ability to meet your objectives.
Some of the key questions that our clients ask us include:
- How much money do I need to retire and what will it cost me now to achieve it?
- What are my financial goals and do I have a plan in place to achieve them?
- Is it possible to increase our spending now and will we still have sufficient money to keep us in comfort in our old age?
- What happens to my family if I am unable to work or if I meet an untimely death?
- W hat is the inherent risk in my portfolio?
- Can I afford to send my children to private school and how will this impinge on my standard of living?
- How can we make the most of our financial resources to help us achieve what we want?
- Are my investments in the right place and invested in a tax efficient way?
- Can we afford to help our children or grandchildren get onto the property ladder?
- How much inheritance tax is payable on my estate?
- Can I afford to purchase a holiday home abroad?
The cash flow forecast will provide answers to many of these questions and can produce a summary projection of your likely income position at, and throughout, your 'life in retirement', taking into account total assets, liabilities, regular and ad hoc expenditure, health position and inflation. In short, we endeavour to establish whether you are on target to achieve your aims and objectives and the time required to do this.
We start with a base plan and with a consolidated balance sheet (what you own and owe) and cash flow statement (what you earn and spend) representing the 'here and now' of your planning. For clients with a multiplicity of assets, the cash flow forecast presents an overview of these, together with your financial position, in one place. Consequently, it’s an invaluable document in itself.
Lifetime Cash Flow Planning will also help you to visualise your current wealth. It works by showing how certain goals and life events or decisions may affect your wealth over time. It’s an opportunity for clients to take an honest look at their current wealth, think about their objectives and decide what they would like to achieve.
Once everything has been considered and a detailed analysis has been constructed, it’s a straightforward exercise to model all manner of scenarios, both planned and unplanned. The initial process typically takes two or three hours.
We often ask clients whether they make advanced and detailed plans for their summer holiday. Usually the answer is a resounding yes. However, if we ask whether they comprehensively plan their future financial position, the answer is often different. There are a whole host of reasons as to why this is the case but through Lifetime Cash Flow Planning, our clients have found that they achieve a greater level of financial control, become more engaged with their finances and even enjoy the experience.
For further information, please contact Sam Whybrow or Neville Pereira at Lubbock Fine Wealth Management.
This article is for information only and professional advice should be taken in advance of any changes to your financial affairs. HM Revenue & Customs’ practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen. Tax advice and National Savings & Investments are not regulated by the Financial Conduct Authority. Lubbock Fine Wealth Management LLP is an appointed representative of Financial Ltd, which is authorised and regulated by the Financial Conduct Authority.