What is financial planning and how does it work?

Do you have financial goals in your life that you wish to achieve?

Are you looking to save or invest for the first time? Or are you wanting a comfortable retirement in the future? Financial planning is what you need.

financial planning

Whatever you want to achieve in your life, having a financial plan in place with the help of an expert financial planning adviser, can help to ensure you hit those goals in the best possible way.

Let’s explore what’s involved when financial planning, and how a financial adviser can help you with that plan.

What is financial planning?

Financial planning can be likened to planning a journey. But instead of getting from A to B, it involves the steps and stages in your life and the investments and savings that correlate with those stages.

An effective financial plan can be done by an individual alone, but the best way to create such a plan is with the help of a professional. The aim of financial planning is to formulate a bespoke strategy that will help to meet your financial aspirations, through the management of your finances.

As previously mentioned, this could be for the peace of mind that your financial future is in safe hands, or to align with the wishes you have for your personal lifestyle. Financial planning could also include investment management of your assets to build a portfolio that matches your goals. Or, it could be to ensure you have enough in your pension pot to retire comfortably or pay off your mortgage in an efficient way.

How can a financial planner help you?

Seeking advice from the experts can help you to fully understand what your financial goals are and solidify your aspirations. With this in place, together you can build a strategy that can then meet your goals.

Compared to tackling the task alone, a financial adviser or planner can examine your financial situation in depth in order to formulate the plan. They can use their expertise to implement strategies that can ensure you are making the most of your pension, or manage your finances in the most tax-efficient way, for example.

Within the umbrella of financial advisers, you may also find that some are specialists in particular fields. This means that some may be able to focus on your estate planning, for instance, and how you can pass on your wealth to the next generation. On the other hand, they could offer guidance on financial protection, so you can rest assured that your income or business is protected in the right way. Other financial planners could offer a more holistic approach.

Whichever you choose, you’ll want to build a long-term and trustworthy relationship with your financial adviser to ensure they have your best interests at heart.

When do you need a financial plan and adviser?

You can create a financial plan at any stage in your life, in fact, the earlier you do so, the better, in some cases. However, there are some specific instances when you’re likely to be making major financial decisions, where having a plan in place and the guidance of a financial adviser, can be hugely beneficial.

Some examples of such circumstances are when:

  • You have specific financial goals
  • You’re planning for retirement
  • You want to reduce your tax liability
  • You need investment advice

The world of money, finances and investing can be complicated to navigate. So, in order to make sure you are fully prepared for the road ahead, it’s always best to create a financial plan and seek the advice and expertise of a financial adviser.