Advice is crucial in times like these - when times are good and confidence is high, most financial advisers should be able to help generate at least reasonable returns. However, at times such as these we are currently experiencing, it’s imperative that you have the reassurance of a ‘trusted helper’ you can rely upon to guide, support and advise you.
First and foremost, does your financial adviser really know and understand you, your objectives, exactly what you are trying to achieve, and your attitude to what risk, if any, you are prepared to take to help achieve your aims and objectives? Understanding how much risk you are prepared to take, or indeed are currently taking on an existing investment or pension portfolio, is crucial. This is very personal to you and can change over time, depending on your objectives, your experiences and current circumstances.
Attitudes to risk vary greatly, with some individuals looking to take a more cautious approach with their investments during these uncertain times, whereas others wish to take a more bullish approach, as they have greater levels of confidence in what lies ahead. Only when your financial adviser really understands you and your personal approach to risk are they in position to advise you.
Whilst the potential of a no-deal Brexit, and the implications thereof, may seem daunting, a good financial adviser will help you understand the principles of investing and the techniques available for managing risk effectively, through diversification across the four main asset classes of Cash, Fixed Interests, Property and Equities. No financial adviser, however, can claim to be able to predict the peaks and troughs of financial markets, and it’s extraordinarily difficult to time exactly when the best days to invest will be. However, ‘time in’ the markets, not ‘timing” the markets, is generally the most effective approach over the medium to long term.
Effective tax planning can be equally as important as the style of investment chosen, particularly if there may be the potential for tax changes following Brexit. After all, there is little point in taking the time to search out the most appropriate investments to help you achieve your objectives, if tax then reduces, or even wipes out, the return. Again, everyone is different, so it’s important to take care to ensure the most appropriate tax wrapper(s), be that ISAs, Pensions, General Investment Accounts, Investment Bonds or any other investment vehicles, are selected depending on your circumstances. Whilst we may know what the present ISA and Pension allowances and rules are, these could change in the event of a no-deal Brexit and/or an emergency budget, so it makes sense to use all appropriate available allowance now.
The potential impact of a deal or no-deal Brexit does not change some of the other fundamentals of good financial planning, such as whether you are protected against the unexpected happening, for both individuals and businesses, in terms of life insurance, critical illness cover or income protection. Unfortunately, this is a fact of life that can definitely be planned for with good advice, both before and after whatever happens with the current Brexit conundrum.
Most importantly, now is not the time to try and go it alone – even if you think you have the knowledge and experience. Regrettably, we have seen many people where self-select investing, whilst on the face of it may save costs, has been a very expensive experiment! n