Tips to Help You Formulate Your Personal Financial Plan


There are many, many professionals offering financial advice, and in the internet age, this truth has become more apparent than ever. Many investors struggle to know where to start with so many available options. More importantly, few know which questions to ask to find the right financial adviser for them—hopefully one who will take into account all the personal factors relevant to your unique financial planning circumstances. Here we’ll discuss some important things to look for and consider as you search for the right financial adviser for you.

Understand Your Financial Goals

Good financial advice will help you first identify and understand your financial goals and objectives. Even the best investment strategies in the world are of little use if you have not first considered what you hope to achieve.

Goals are a crucial factor of your long-term investment strategy and should help guide many decisions, such as your long-term asset allocation and investment time horizon—how long you need your portfolio to last. Many investors opt for a portfolio tailored to their individual situations. Your goals are important, but a good investment strategy and investment plan should also take into account your personal circumstances such as your health, marital status, family history, pension and other income, mortgage debt and more.

Ultimately, your financial goals will serve as the backbone of your financial plan and will be one of the first steps before determining your asset allocation. Once you have determined your financial goals, you can focus on how to achieve them.

Your Investment Time Horizon

Your investment time horizon is how long you will need your portfolio to last. Depending on your investment goals, your investment time horizon could be your life expectancy, your spouse’s or child’s life expectancies or another period of time. Remember average life expectancies are just that—averages. Planning for the average is not optimal as you may live far longer than the average. For many investors, the last thing they want is to run out of money in their portfolios.

Investors with a focus on leaving a legacy may have an even longer investment time horizon depending on their chosen beneficiaries. There are also many factors to consider beyond average life expectancies, such as your current health status, your current living expenses and hereditary health history. The bottom line is that your investment time horizon may be much longer than you expect—you may need additional growth to ensure you do not deplete your assets.

Consider How Much Growth You Will Need

Do your financial goals require long-term portfolio growth? Determining your income needs will likely be an important factor in determining your asset allocation. Investors with a pension that will supplement their income may not need as much growth as an investor relying solely on income from a retirement account. Other investors aim to make an impact after they pass away, supporting a spouse, leaving money to family or donating to a charitable organisation. Depending on how much you plan to withdraw and pass on to others, you may need to endure some volatility in order to attain the growth needed to meet those goals.

When creating your long-term investment strategy, remember to take into consideration the effects of inflation and the possibility that you live longer than you originally expected. For some investors, financial advice can be essential to making sure you are accounting for these important factors and reducing your chances of potentially running out of money. 

Questions to Ask Your Adviser

Understanding the finance firm or individual’s experience will be important in understanding if you are working with the most qualified option available. Also, you should understand who is making investment decisions within your portfolio. Is the same adviser providing you with financial advice the one choosing which investments to hold? Or does your adviser have an experienced research team backing their decisions?

What kind of client service will you receive? If your financial advice doesn’t include regular, ongoing coaching and counselling, you may not be getting the support you need to reach your goals. It’s easy for individual investors to make poorly-timed, emotional trading decisions without disciplined and guiding counsel.

It can also be good to understand how your adviser operates. How does the firm make money? Does their fee structure make sense and help align their incentives with your goals?

Contact Fisher Investments UK

The financial advice industry is highly regulated and can be difficult to navigate at times, and professional advice from different sources might be conflicting. That is just one reason why Fisher Investments UK is dedicated to helping educate investors. Whether your other income is sufficient for future needs or you need to withdraw from you portfolio, finding the right adviser for you is one of the most important steps you can take towards achieving your long-term goals.

To learn more, download one of our guides or speak with one of our representatives today.

Investing in financial markets involves the risk of loss and there is no guarantee that all or any capital invested will be repaid. Past performance neither guarantees nor reliably indicates future performance. The value of investments and the income from them will fluctuate with world financial markets and international currency exchange rates.