Eight steps to financial fitness


Now is not the time for observation. Comments like “The impact of covid-19 has had a massive effect on many people” will not achieve much.

Now is the time for containing further loss, stopping the possibility of being caught out again and acting on the opportunities adversity always presents.

Now is time for the rational mind, not the emotional.

Now is the time to follow a strong financial planning process.

Not everyone is affected in the same way but all of us use a system of some sort for evaluation, decision making and management to get back on track.

A professional planner will have spent many years perfecting their system so that the probability of success is greatly enhanced. The system should
be followable with relative ease, help maintain the enthusiasm needed to keep going and deliver a feeling of achievement on completion.

How does this work in practice?

Let us take the example of a couple in their mid- 40s who are asking: “How will this affect our jobs?”; “Will this impact on our children’s education?”; “Will it affect the family holidays we can afford?”; “Can we still give our children the start in life we had hoped?”; and “How much can and should the bank of mum and dad help out?”

The answers to these questions may be sought in eight distinct phases.

The first phase is Capture.  Where do I go to get all the data I need to be able to answer these questions? Use a checklist to make sure you have not missed anything.

The next phase is Categorise.  You are trying to organise the data into relevant sections. A structured system has pre-determined tested questions in each phase. We call these a “playlist.” They are designed to get you thinking beyond the obvious.

For a couple in their early 60s, the playlist is likely to be rather different: “How will this affect our retirement plans, and the level of income that we will have to live on?”; “Will it mean that we can leave less money to our children?”; “Can we travel as much as we had hoped?”;  and “Will I be able to afford a care home if needed?”

All of these carry worry and uncertainty. The first benefit of a good playlist is identifying the scale and location of the issues you face.

Prioritise. This is where a good financial planner can make a difference. They will take you through a decision process to identify your true life goals, and how to achieve common consent within your family.

Plan. Write it down so that others can follow. A very simple analogy is comparing an architect with a builder. Do you see a builder before an architect? The value of an architect is in the matching of the clients dreams to the available budget, by usingtheir skills and experience to squeeze out every extra step of value in the situation presented. The builder may have a different skill set, but he or she will have a much greater belief in being able to build the client’s ideal if they are given a detailed plan to follow.

This is the difference between a financial planner (architect) and a wealth manager (builder).

Test. Will the plan deliver under all conditions, even a ‘black swan’ event such as the one we’re living through now? Are we using the right vehicles? Have we maximised all the tax reliefs?  Pensions and ISAs are obvious ones, but there are also EISs, VCTs and business reliefs to be utilised if appropriate.

Communicate. This is something that is generally picked up too late by most people. Education and preparation is key to most successful transitions. It really helps if beneficiaries know what they are likely to receive and to prepare for it, whether they are members of your family or charities.

Implement. This is where the financial planner and wealth manager can be differentiated. Some financial planners stop here, preferring to stay within their specialism, some have both roles in their firm and can work in harmony, others can offer both roles, it depends on the complexity and scale involved.

The final phase is Review. A plan and life are fluid and they need to be kept aligned and up-to-date so that when some threat does appear you are well prepared. Use this enforced ‘free time’ to go through your system or make contact with a financial planner on-line to get yourself financially fit. 



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