When to take financial advice
10 May 2019

Any time could be a good time to ask for financial advice.

The International Longevity Centre recently compared groups of people in similar financial circumstances. Researchers found that those who received financial advice accumulated around 20% more financial and pension assets than those who hadn't.*

But there are some key moments in life when seeking financial advice really makes sense. These moments of change are often associated with big decisions, and always present us with challenges and opportunities. They are an especially good time to ask a professional to help steer you through.

1. Getting married, having children

You’ve settled down, made the commitment and decided to start a family. Having a healthy bank balance will put you in a better position to enjoy family life. A professional adviser can help you make sense of all your options as your financial priorities shift.

When two bank accounts become one?
One of the first things you might want to look at is tax-free allowances. Are you and your partner both using all your allowances for tax-free income, capital gains, savings and pension contributions, to name a few? Moving some assets between partners could reduce your combined tax bill each year.

Getting married doesn’t mean your finances are automatically linked. It’s not very romantic, but having a frank conversation about credit ratings before you apply for joint accounts, credit cards or a mortgage is important.

Invest in your children’s future
Children focus your mind firmly on the future. An adviser can help you prepare for it, whether it’s covering education costs or taking that first step onto the housing ladder. Plus, children can be exhausting, so take any opportunity to delegate!

Junior ISAs are a tax-free way to save for children. The money is locked away until your child is 18, which could coincide nicely with university fees or the need for a car.

2. Receiving a windfall, inheriting money

Receiving a sum of money can transform your financial outlook. But then the pressure’s on to make the most of it, and deciding what to do can be daunting. This is where an adviser can prove invaluable.

In a low-interest-rate climate, it can be tricky to choose between company shares, managed funds, investment trusts, bonds, property funds, or bricks and mortar. And what about all the options you haven’t even thought of?

Having a large lump sum to invest could give you access to vehicles you’ve not been able to invest in before, such as enterprise investment schemes and venture capital trusts. These offer generous tax breaks to those prepared to take more risk. If you’re unsure about the risk you want to take, an adviser could also help – your attitude towards investing, any financial commitments and how much time you have to invest are all contributing factors to consider.

3. Retiring

Retirement planning has become more complex, so this could be another crucial moment for taking advice. Rules introduced in 2015 allow you to use your pension pot however you like, once you’ve reached 55.

Decisions, decisions
You’ll have to consider whether to take out a lump sum up front, and if so, how much. You could buy an annuity, which guarantees you an income for life. Or you could invest in other income-generating products, giving you more flexibility.

In a low-interest-rate environment, people turn to all kinds of investments to boost their income. Buy-to-let has historically been popular, but with recent tax changes, it is becoming less profitable. As well as all the traditional investment products, some choose alternative vehicles, peer-to-peer schemes or selling assets.

Another big question – how much money do you need? Unless you have a crystal ball, a spot of financial planning could help with that too, forecasting what your future might hold.

Not fully retiring is another option. You may want to carry on as a consultant or executive board member. Afterall, going from working 50-60 hours a week to doing very little with your time, could be quite a shock to your lifestyle.

Tax facts
You’ll still have to pay tax as you draw on your investments. But your income levels could be quite different from when you were working, so you may need to re-think your entire tax situation.

An adviser is well equipped to analyse your situation, help plan your approach, and advise on suitable tax wrappers to use and tax treatments.

4. Passing wealth on

Rising house prices have pushed more people than ever before into the dreaded inheritance tax net. Over £5.1 billion was paid to the Treasury in inheritance tax in the 2017/2018 tax year – a record amount.**

Nobody wants to leave their loved ones with a huge bill. With careful planning, you can reduce the impact of this hefty 40% tax. Giving money away at least seven years before you die is one way, and there are various types of trusts that you could set up for future generations.

When there’s a Will, there’s a way
Not always the most cheery subject, but make sure your Will is done by a qualified adviser or solicitor, and is up to date. This ensures that everything will be quicker and easier to sort out after you’ve gone.

Estate and tax planning can be complicated, and the rules change often, so it is well worth getting advice.

If you’re approaching one of these crucial moments, and you’d like some professional advice to see you through the changes, call us on 020 3823 8678.


This article originally appeared in our client magazine, InBrief. You can view a copy of the full magazine here


* Source: International Longevity Centre
** Source: HM Revenue & Customs

Explicit explanations

"Thank you very much for meeting with my wife and I to discuss inheritance tax and other associated issues, at your office. Your explicit explanation of the above matter has clarified a number of important fiscal areas, which has given us further food for thought."
Property Developers, London

Talk to us, at a time to suit you

Give us a call today or leave your details below and one of the team will call you back.
* indicates required field

Our offices

© 2001 – 2019 Seven Investment Management LLP. All rights reserved.

Seven Investment Management LLP is authorised and regulated by the Financial Conduct Authority,
the Jersey Financial Services Commission and the Guernsey Financial Services Commission. Member of the London Stock Exchange.
Registered office: 55 Bishopsgate, London EC2N 3AS. Registered in England and Wales No. OC378740.

The value of your investments and the income from them may go down as well as up, and you could get back less than you invested.

An error occurred!