New Year resolutions tend to focus on health goals, but your financial wellbeing could also be greatly improved by breaking a few bad habits. It can be difficult for cash-rich, time-poor people to keep on top of everything, so see where you could make some proactive moves.
1. Know your worth
It’s not easy keeping track of everything, but everyone should regularly review their overall financial position, setting all assets and incomes against liabilities on a short, medium and long-term view (and including the whole family where appropriate too). You are likely to find that the process of working out your net worth uncovers issues in your investment management or financial planning that need to be looked at, and this will also help keep your insurance coverage up to date (life insurance included).
A professional wealth manager will doubtless see other tax or investment efficiencies that can be gained, simply by carefully going through your risk-profile and needs, as is standard at the start of relationships and at regular review meetings.
2. De-clutter your investments
It’s incredibly common for people to accumulate a collection of ISAs, pensions and other investments that are not being managed optimally, and certainly not in alignment with an overall investment strategy. Ideally, all your investments and assets, incomes and liabilities should be viewed in the round by an adviser who knows your situation and goals very well.
Ideally, all your investments and assets, incomes and liabilities should be viewed in the round by an adviser who knows your situation and goals very well
A wealth manager will be able to review all your investments, to ensure that your portfolio is correctly diversified across asset classes and that they are all performing as well as they might; this may well include looking at your family’s holdings as well, which can help uncover various tax advantages.
3. Stop paying more tax than you need to
Death and taxes may well be the only two certainties in life, but you have far more control over the amount you hand over to HMRC than you might think. There are a multitude of perfectly legitimate tax mitigation strategies that High Net Worth Individuals can deploy across Income, Capital Gains and Inheritance Tax, and there is a whole sub-discipline of wealth management which takes advantage of generous tax breaks on offer for investments into smaller UK companies (see our Guide to private company investing for one route in).
There are a multitude of perfectly legitimate tax mitigation strategies that High Net Worth Individuals can deploy across Income, Capital Gains and Inheritance Tax
Your tax bill might have really started to bite, you could need guidance on pension taxation or have IHT reduction in mind – these are just a few of the tax related queries that spur our users to seek professional advice.
Top Tip
Getting proactive about growing your wealth is a great way to start the year, and our smart online tool takes all the legwork – and guesswork – out of finding precisely the right wealth manager for your profile and needs.
Lee Goggin
Co-Founder
4. Don’t be complacent on costs
Fees and charges can prove a huge drag on investment returns over the long term, so you must see performance in terms of net gains, once all costs have been deducted. Regulations oblige wealth managers to make investors aware of all costs applicable to their portfolio, so be sure to ask if any require further explanation. Our guide, What to expect from wealth management fees provides invaluable guidance for new and experienced investors alike.
If you suspect you could be receiving better value, or are a DIY-investor who would like to see how net gains could improve, see what your best-matched wealth managers have to offer.
5. Conquer inertia
It’s all too easy to let things we perceive as tricky slide, and we’ve surely all been guilty of that in financial matters, but the benefits of conquering inertia are so compelling that you should be spurred into action. Harness the magic of compound growth by investing as early as possible; put solid pension plans in place and set up strategies to reduce tax well ahead of time – so all wealth managers would advise. Add to that list the improvements to performance, costs and service that you could achieve by changing provider or using a professional for the first time.
It’s all too easy to let things we perceive as tricky slide, and we’ve surely all been guilty of that in financial matters, but the benefits of conquering inertia are so compelling that you should be spurred into action
Becoming a client is a simple process and, as our Essential guide to changing wealth manager explains, finding a better match is easier and faster than you might think.
Get the year off to a great start
Getting proactive about growing your wealth is a great way to start the year, and our smart online tool takes all the legwork – and guesswork – out of finding precisely the right wealth manager for your profile and needs. Browse our Knowledge Centre to find wealth management content tailored to every type of client or contact our expert team to talk about your needs.
