How can you take control of your finances?
HAVING a conversation with a financial professional can give you peace of mind and help you to plan for the future by making the most of what you’ve got, says Andrew Stansfield, investment manager at Charles Stanley Cardiff.
However, there are some practical things you can do yourself to tackle those financial and administrative tasks to ensure everything is up to date. Below is a checklist of financial activities to consider.
1. Make the most of your tax allowances and exemptions.
The new tax year opened on April 6. You can shelter up to £20,000 in tax year 2020/21 with tax-free Individual Savings Accounts (ISAs). At Charles Stanley, we have taken advantage of the recent market volatility to complete ‘Bed and ISA’ transactions for those investments which form part of our long-term core investment strategy. By selling these investments in client’s taxable portfolios, and simultaneously repurchasing in their ISA portfolios, any sharp rebound in equity prices will have the benefit of occurring within the capital gains tax- and income tax-free environment of the ISA portfolios.
2. Ensure your paperwork is in order.
Now is a good time to ensure you have all your paperwork in order and your family know where all this information is stored. It is also a good idea to engage your family in discussions about your financial situation.
We understand that conversations about money are rarely easy or straightforward, particularly when your family is involved. For instance, our research shows only one in five (21%) adults in the UK have open discussions with their relatives about inheritance, risking bigger inheritance tax bills than are necessary.
It’s important that families have the ‘money talk’ so they can plan ahead and as much of their hard-earned money as possible is passed on to loved ones so they can make the most of it.
■ Visit charles-stanley.co.uk/ conversations to download a free guide which has tips about how to talk to your family about money and what you should talk about.
3. Consider a lasting power of attorney (LPAs).
People of all ages and levels of wealth should consider LPAs which allow your loved ones (known as the attorneys) to carry out your wishes if you become unable to do so yourself.
If you have one in place, it is important to let your attorneys know you have appointed them and inform any professional advisers you work with, such as financial advisers, investment managers, solicitors and accountants.
4. Review your will.
Do you have a will and when did you last update it? Everybody should have a will and it should be reviewed every couple of years to ensure it reflects your current situation. It’s also important that you are open about your plans and talk with family members about your decision-making to avoid any future family tension. Our research shows that only half of UK adults plan to split their wealth equally among their children, but a third of adult children would be upset if their parents showed favouritism.
5. Go digital.
Most financial institutions have an online client portal where you can review your finances, along with any important documentation. Since implementing lockdown measures, our reliance on technology has increased and having digital access to accounts is becoming increasingly necessary. However, it is also important to keep yourself safe online and make sure your provider has adequate security measures in place and that where possible you are using two-factor authentication (2FA) where you use two pieces of information to prove (authenticate) your identify and access your account, such as a password and a code sent to your mobile phone.
6. Be vigilant against fraud.
The toxic mixture of volatile markets, lockdown isolation, reliance on the internet for financial information and inventive criminality, has led to a boom in online fraud and scams.
We advise you to be cautious with any unexpected calls, texts or e-mails asking or enticing you to do anything. A new reporting service has been set up by The National Cyber Security Centre and the City of London Police. You can play your part in preventing these crimes by forwarding any suspicious emails to report@phishing.gov.uk and they will then use this information to help remove criminal sites and operations.
7. Make a plan.
Be clear on your life goals and what you want to achieve so you can plan your finances accordingly.
Consider your more immediate priorities such as buying a house or paying a mortgage or paying off debt and balance those against future requirements such as pension, retirement and estate planning.
8. Get advice.
In a world coming out of lockdown and following extraordinary levels of government and central bank support, it is worth reviewing existing plans to ensure they remain suitable for what may lie ahead.
If you’re thinking about your family’s financial future and would like to know how our services can help, please get in touch to arrange your free consultation with a member of our Cardiff team.
■ For information on how Charles Stanley can help you plan a more prosperous future, call 029 2000 2623 or visit www.charlesstanley.co.uk/cardiff-office
■ This is not financial advice based on circumstances. The value of investments, and any income derived from them, can fall as well as rise. Investors may get back less than originally invested. Charles Stanley & Co Limited is authorised and regulated by the Financial Conduct Authority.