Before visiting the Financial Advisor

pushycat

Hello, I have an appointment booked with an IFA and would appreciate some help to make that visit more effective.
We are a couple in our late forties, have paid off the mortgage, are debt free and have about £200k in savings scattered around ISAs, National Savings and various bank accounts. I work and put £750 per month into my company pension but my partner no longer works and isn't likely to in the near future. We have three children and our main aim is to ensure a decent retirement for both of us (in ten years time) and to have sufficient funds to help the children onto the property ladder.

Any advice regarding the general approach we should take to meet these ambitions would be welcome.

lozzy1965

A simple first tip is get as much money as you can into these new(ish), high(ish) interest rate bank accounts that seem to be cropping up everywhere!
We are in the Santander123 account. £500 needs to go in a month and you need £300 to £20,000 to get 3% interest on the first £20,000. Additionally, if you get all your direct debits coming out of the account, you will be rewarded with 1, 2 or 3% cashback, which more than covers the account monthly fee. There are other accounts, and you can double and treble up on some of them by moving your money around between different providers. That's the best safe place to put your emergency funds for easy access I believe.
For the rest of it, I would invest in the Stock Market within a Self Select Stocks and Shares ISA (trickling the money in as the yearly limit allows), but that depends on your appetite for this kind of investing and attitude to risk, which the IFA should assess you on.
Hope that gives you a good starter for 10

jimjames

First thing - check it is an IFA and not just a bank adviser who can only offer advice on their own products.

Increasing pension may well be worthwhile if you are looking to retire early. You probably will want to move some of your cash into share based investments to try to beat inflation but that could be inside a pension or S&S ISA.

kidmugsy

If your partner isn't likely to be liable to income tax after age 55 it might be a good idea to contribute £2880 (net) to a personal pension for him each tax year. HMRC hands £720 p.a. to the provider to boost the fund to £3600 p.a.; at 55 he can start drawing money out tax-free.

You could also keep an eye on how much State Retirement Pension each of you is going to be qualified for, and consider "top up" payments at some time.

If after the £750 p.a. pension contributions you are still paying Higher Rate Tax, consider contributing more.

Is your partner available as a tax shelter for savings/investment income at the moment?

gadgetmind

pushycat wrote: »

Any advice regarding the general approach we should take to meet these ambitions would be welcome.

Yes, go and see an IFA!

How feasible your plans are depends on how healthy that pension is, what your state pension will be, and what you feel you'll need to live on in retirement.

wigglefish123

A simple first tip is get as much money as you can into these new(ish), high(ish) interest rate bank accounts that seem to be cropping up everywhere!
We are in the Santander123 account. £500 needs to go in a month and you need £300 to £20,000 to get 3% interest on the first £20,000. Additionally, if you get all your direct debits coming out of the account, you will be rewarded with 1, 2 or 3% cashback, which more than covers the account monthly fee. There are other accounts, and you can double and treble up on some of them by moving your money around between different providers. That's the best safe place to put your emergency funds for easy access I believe.
For the rest of it, I would invest in the Stock Market within a Self Select Stocks and Shares ISA (trickling the money in as the yearly limit allows), but that depends on your appetite for this kind of investing and attitude to risk, which the IFA should assess you on.
Hope that gives you a good starter for 10


Not sure why you would see an IFA if this was the route you were going to go down? Surely this is a self select route as an alternative to advice?

Daniel54

pushycat wrote: »

Any advice regarding the general approach we should take to meet these ambitions would be welcome.

I have found using an IFA to be extremely helpful in developing plans for retirement.In terms of general approach my suggestion would be

1) Have a detailed and realisitc think together about how much net income you wish to have in retirement.

2)If you have not already filled in a factfind,be clear what assets you have and what return you are currently receiving from them

3)Think about your tolerance for loss.I think one of the most important aspects of the relationship with your IFA is a mutual understanding of where you sit on the risk/reward scale.You may find that you will need to adjust some plans if it is unlikely you will get to your targets within your loss tolerance

4)If you don't understand something,don't be afraid to ask .You are the client

Hope this helps and good luck

gadgetmind

Daniel54 wrote: »

I think one of the most important aspects of the relationship with your IFA is a mutual understanding of where you sit on the risk/reward scale.

I personally found this was the part of the process that felt the most like art and the least like science, which is something that turns me off. However, each to their own.

Daniel54

gadgetmind wrote: »

I personally found this was the part of the process that felt the most like art and the least like science

I agree it is not science,whatever some number crunchers would have us believe.Thinking probablistically around a range of possible outcomes does not come naturally and lacks certainty.I happen to do it for a living,so maybe found this more interesting than you

Nevetheless it is important not to be invested outside risk tolerance parameters ,hoever inexact they might be

gadgetmind

Daniel54 wrote: »

Thinking probablistically around a range of possible outcomes does not come naturally

That's why we teach maths as school, including modules on statistics and probability.

I just don't see the value in asking someone's attitude to something they don't understand as it seems to just deliver "garbage in, garbage out".

lozzy1965

wigglefish123 wrote: »

Not sure why you would see an IFA if this was the route you were going to go down? Surely this is a self select route as an alternative to advice?

Was meaning to offer advice for this bit of the OP's post:

pushycat wrote: »

Any advice regarding the general approach we should take to meet these ambitions would be welcome.

But it's worth knowing the options, self select or otherwise, before talking to the IFA. The IFA should perform an attitude to risk assessment, and should advise on all types of investments as a result, including - if appropriate - a self select route, with advice.