What do I need to think about?
Whatever your circumstances and irrespective of whether you are looking to build your wealth through investment or pension products, there are some fundamental factors that you will need to consider in conjunction with your adviser.
What is my objective?
Clarifying the purpose of your investment is key. Are you looking for income now or at some point in the future? Are you expecting to pass the investments to the next generation? Do you have a specific saving objective in mind? Your adviser will need to understand your motivations fully, prior to making any recommendations
What is my time horizon?
In other words, how long do you plan to hold the investment? If you are thinking of a time frame under five years, you should probably be considering bank, building society or national savings accounts. If you are thinking longer term, the range of options is immense. Our general view is that you should look to invest across a range of asset types. This will include stocks and shares, both UK and Internationally, Fixed Interest instruments (such as Corporate Bonds and Government Gilts), Commercial Property, Commodities and so on. Deciding on the right blend (the asset allocation) and the most suitable method of management is an area where our advisers can help.
How much risk am I prepared to take?
If you are looking for a return on your investments greater than the interest rate (net of tax) you can get from a deposit based investment, you have got to be prepared to take some risk. This could be a small risk if looking at products such as Structured Deposits, or very significant risk if selecting an adventurous portfolio of international stocks and shares. There are many options between these two extremes. Our approach to assessing your attitude to risk starts with a questionnaire designed to ask you some challenging questions about your approach to the management of your money. Once we know the results, we will discuss your views further and only stop discussing them when you are happy with the end result. We will also want to understand whether you have any debts - it might be best to pay these off first.
What is the most tax efficient solution?
Are you using your ISA allowance each year? If you have children or grandchildren under 18, are they using their Junior ISA allowance? Are you making use of your annual Capital Gains Tax allowance? If the money is destined for the next generation (but you don't want to pass it over now) how can you avoid paying Inheritance Tax through the use of trusts or investments which do not attract this tax? If you are working, are you maximising your pension contributions? Your adviser will help you to clarify the best route for you.