Financial planning can help you to reach your life goals, and give you and your loved ones security and peace of mind. Over the next few months, you can read our blog to discover exactly why a financial plan that’s tailored to you can add value – and we’ll start with the financial benefits.

When you think about seeking financial advice, one of the first advantages that may come to mind is the opportunity to grow your wealth. Making the most of your assets could be essential for reaching your aspirations, from retiring early to passing on a nest egg to the next generation. 

There are many reasons why working with a financial planner could help increase the value of your assets, including these five. 

1. A financial plan starts by setting out your goals 

A goal that simply states “I want to grow the amount I have in savings and investments” is vague. Poorly defined goals may make it difficult to assess if you’re on the right path and determine if the steps you’re taking are successful.

An effective financial plan starts by understanding what you want to achieve and how the value of your assets might need to change to turn it into a reality. 

Let’s say you want to ensure your retirement is secure. A financial plan could help you understand what income you’d need to generate in retirement to live the lifestyle you want, and how you’d need to grow your assets during your working life. So, your goal might become: “I want to be able to retire at 60, and to do this I need £1 million in my pension fund.” 

With a clearly defined target, you might be in a better position to increase the value of your assets and it could motivate you to stay on track. 

2. Identify which steps could lead to the outcome you want

Once you have a clear goal, you’ll often need to break down the steps you’ll need to take to reach it. When doing this you might have questions about which approach will help you to make the most of your money. 

For instance, if your goal is to save on behalf of your child so you can pass a nest egg on to them when they’re an adult, you might have questions like: 

• How much do I need to set aside each month to reach my target? 
• Should I save for my child through a Junior ISA or savings account?
• Does it make sense to hold the money in cash or to invest it?
• What steps can I take to ensure the nest egg isn’t wasted?

The answers will depend on your circumstances and priorities. For example, if you’ll be building the nest egg over the next decade, investing the money could make sense as you have a long time frame. On the other hand, if you plan to give your child the money in two years to support them through university, cash might be more suitable. 

Choosing the “right” approach for you could provide security or mean you’re able to reach your target sooner. A financial planner can work with you to understand your options and how they might affect the outcome. 

3. A financial planner could help you understand your risk profile

If you’re seeking to grow the value of your assets, it might involve taking some risk. 

For some people, taking investment risk can be scary, and they might even put off investing altogether. Indeed, according to an Aviva survey, 18% of women who don’t invest said their decision was due to risk. 

No one wants to see the value of their assets fall during a downturn, but if you want to grow your wealth in real terms, risk might be necessary.

The money you hold in a cash account may seem “safe” but once you factor in inflation, it’s likely the value of your savings in real terms is falling. This is because as the cost of goods and services rises, the spending power of the cash will fall. 

Managing fears to understand what risk is appropriate for you and your goals can be difficult, but working with a financial planner could give you confidence and ultimately lead to your wealth growing. 

4. A financial planner could determine which tax allowances and reliefs to use 

Taking advantage of appropriate allowances and reliefs could reduce your tax bill and provide a boost to your wealth.

However, tax rules can be complex and difficult to understand how they apply to your situation. A financial planner could add value here by identifying how to use allowances and reliefs to make the most of your assets.

As well as understanding which reliefs or allowances make sense for you, it’s important to keep on top of changes. For instance, in 2024/25, there have been cuts to the amount you can earn from dividends and profits when selling assets before tax is due. If you missed the announcement, you could face a larger tax bill than expected.

Regular financial reviews could ensure your financial plan reflects current legislation and highlight when new opportunities might be suitable for you. 

5. A financial planner could highlight potentially harmful reactions 

How you respond to news or challenges could affect your financial plan. Even the best-laid plans could be knocked off course if you make a knee-jerk decision.

If your financial plan involves investing, how you respond to market downturns or short-term volatility could have an impact. In response to the value of your investment falling, you might be tempted to sell. However, you could be turning paper losses into a reality, and you may miss out on the market bouncing back and delivering potential returns over a long-term time frame. 

While investment returns cannot be guaranteed, historically, markets have delivered growth over the long term. So, reacting to news could mean that your investment returns fall short of expectations.

Working with a financial planner could help you identify behaviour that could harm your progress  towards your financial goals and the value of your assets. 

The intangible benefits of effective financial planning could be just as valuable 

While growing your wealth might be one of the key reasons you initially seek financial advice, the intangible benefits could be just as important. Among them might be an improved sense of wellbeing or a greater focus on your goals, which could mean you’re more likely to reach them. 

Read our blog next month to take a closer look at why the emotional benefits of financial advice add value too.

If you’d like to talk about how we could support your financial and lifestyle goals, please contact us. We’ll work with you to create a tailored plan that could help you grow your wealth and feel more confident about the future. 

Please note:

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. 

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

The Financial Conduct Authority does not regulate tax planning.

Approver Quilter Financial Services Limited & Quilter Mortgage Planning Limited.  08/05/2024