We have previously talked about the importance of having a sound financial plan in place – which will be unique to you and your life’s journey. What will also be exclusive to you are the underlying investments that help you achieve your plan. Without a plan you cannot determine what these investments will look like or how you need them to perform. These investments and their inherent performance will vary for each of our clients, what is right for some clients won’t be for others, that is why we say don’t look at performance in isolation.
You will always hear a lot of background noise in the press and the media regarding performance but like a lot of news this is a distraction from the important facts and can lead people in the wrong direction.
Chasing performance is a trap that many people fall into without knowing what they really need to achieve. It is important to take time at the outset to really understand your goals and how and if you can achieve them.
Focusing on performance doesn’t tell you if you’re on target to achieve your financial goals. It’s one of many indicators to help direct you, but without a good financial plan, you have no idea if you’re heading in the right direction. You might be happy with your portfolio’s current performance, but that doesn’t mean you are prepared to ride the wave when the markets fall.
You may often hear fund managers being hailed as heroes based on the performance they have achieved. While this maybe outstanding, it is with good reason that we always state past performance is not a guarantee of future performance. It may be an indicator but not one you can rely on.
Many people compare the performance of their investments with benchmarks such as the FTSE 100, however investments aligned with the FTSE 100 may not be appropriate for you. It may not have the right combination of shares, gilts and bonds that will help you to achieve your goals or that you are comfortable with. So, save yourself the worry and focus on what’s important for you and what you can control.
Another discipline a financial plan provides is taking a long term view and not making impulsive decisions based on what is going on around us. Several studies have shown that investors as a group tend to underperform because they chase performance. This can mean they will buy investments that have recently performed well and are therefore at a high price and sell those that have not performed well when their value maybe at rock bottom. Making knee jerk decisions can often contradict your long term goals, it is much more beneficial to stay with your lifetime plan.
Of course, we will always consider performance however the main focus must be on what is important to you. This will mean that you are more likely to reach your personal goals with less to worry along the way …………….and as a result enjoy life!
As a Group Brunel and Pilgrim are delighted to announce their continued sponsorship of Josh Bayliss a rising star at Bath Rugby. Josh was awarded Academy Player of the Year for 2017-2018 season, before signing his first senior contract and moving to the 1st team in June 2018. We wish both Josh and Bath a successful season as he continues to add to his first team appearances.
Arnold Wills was delighted to present West Mendip Hospital with 50 tea pots on behalf of the Wells Dementia Action Alliance (WDAA). The tea pots will be used to help those living with dementia to retain their independence as they prepare to return home at the end of their hospital stay.
Pilgrim Financial Planning became founding members of the WDAA after Arnold and Julie found shops in Wells showed Arnold’s mother such kindness and assistance as she struggled living alone and trying to cope with her dementia.
The year before Sybil went into residential care was a huge struggle. Julie and Arnold found it very difficult to find out what support networks existed and where practical help and advice could be found. They set out to ensure others would find help more easily and that there would be a greater understanding of dementia across the community in Wells.
The Pilgrim team attended an awareness session and became “Dementia Friends” and to date 1,250 people across businesses and organisations in Wells and the surrounding area have become Dementia Friends.
The WDAA comprises of representatives from local businesses, civic organisations, health and social care providers, schools, faith groups and rescue services and Wells has now become a Dementia Friendly City. The Alliance aims to raise awareness and remove barriers for those living with dementia and those that care for them so they are supported by the community as whole.
For more information on how to become a Dementia Friend visit www.dementiafriends.org.uk
On July 7th, with temperatures well into the 20C’s staff from the Bristol office headed off to the Lake District National Park for their two day challenge to raise money for Children’s Hospice South West.
Saturday saw a 3½ hour climb up the rocky and steep slopes of Scafell Pike to the summit and 2 hours to come down again………knowing a cool drink was waiting at a local hostelry was a great motivator. While we were all exhausted and well baked by the sun it was a great feeling to have completed the toughest climb (978metres) of the two days.
Sunday morning, we started our ascent of Old Man of Coniston, and were thrilled to stumble across a fresh water lake two thirds of the way up, we just couldn’t resist a dip. We made it up and back down the ‘Old Man’ in 5 hours.
We were all really pleased to have completed the challenge for Children’s Hospice South West who do a fantastic job supporting children with life limiting conditions and their families and are looking forward to our next trek. We raised a total of £1,300 , smashing our target by £300, a big thank thank you to all those who contributed.
Many people, understandably, have a wish to leave a legacy on their death. One of the questions we often ask clients is why not gift that money now and watch others benefit from it while you are alive?
There are several responses to this question but the most common is a reluctance to give away capital that may be needed in the future. Again this is totally understandable but I would argue doesn’t always reflect your true financial position – you simply may not know how much is enough… yet.
By using our cash flow forecasting software we are able to run through scenarios with our you to see how much is enough and what amount of capital you are realistically never going to need during your lifetime. If you haven’t seen the full impact of our cash flow forecasting this could be a good time to start. If you are already familiar – are you harbouring any desire to explore gifting further?
One of our clients recently admitted to me that they would dearly like to help their Granddaughter out with education costs as her parents were struggling to raise the finances. They were passionate about helping their family but had not yet given themselves permission to handover the money for fear they would need it themselves. By making some conservative assumptions we demonstrated that they could comfortably gift the money and never run out themselves. The outcome – a very happy family and the reward for the Grandparents of seeing their heard-earned wealth used for the good of their loved ones!
It isn’t always about helping family. We all become touched by a particular good cause or local project that would benefit hugely from additional support. What if you could help a local good cause or a charity close to your heart and then see the benefits to those you have helped? Surely that is a more rewarding use of your surplus capital than sitting and waiting for them to benefit after your demise.
People who go through this process feel a great peace of mind to know they will never run out of money but also an immense sense of satisfaction that they could pass on money now and enjoy seeing the benefits to those they have helped.
Not only is this an emotionally rewarding experience, it makes good sense for Inheritance Tax (IHT) planning too.
Everyone has an ‘annual exemption’ of £3,000 to make gifts without IHT consequences as well as smaller gifts of £250 but more substantial gifts are also possible and providing you live another seven years will be completely free of IHT allowing wealth to pass through generations.
Those wanting more control or not wanting to make large gifts have a range of other options to mitigate IHT. The message is the same as always – talk to us about it. You might be surprised what you can give away now without jeopardising your own lifestyle.
We’re pleased to say we’ve not been resting on our laurels here at Brunel! We recently had our British Standard Audit and have just heard that we have passed again, meaning we can carry our BS8577 accreditation on for another year. This Standard evaluates the ‘framework for the provision of financial advice and planning services’ and is one we place great value on as it reflects our commitment to quality and continuous improvement. Read more …
Last month our Client’s Corner feature was an article entitled ‘God bless the Brits’ and expressed some pretty strong views in favour of the Brexit result.
It certainly produced some strong reactions from some of you and so we’d just like to explain the background behind it. We included the piece, which was written by Nick Murray, as an alternative view from across the pond. Nick is based in Southold, NY, in the States and is in his 50th year in the profession of financial advice. He is a well-known speaker within the industry and is the author of eleven books for financial services professionals. Read more …
Set to be introduced in April 2017, the Lifetime ISA essentially offers an alternative to the Help To Buy ISA. With two competing options on the table, it’s important to know which is best for you and your needs, as whilst they have some similarities, there are also key differences between the two. Read more …
As fellow Bristol residents will probably already know, we’re lucky to live in and around an active city, full of events, things to do and places to see. Summer 2016 promises to be no exception, with Bristol offering some fantastic ways to get out and about and enjoy all that the city has to offer. A quick search on the Visit Bristol website reveals 456 events scheduled before the end of August, so what are some of the highlights we should all be taking note of over the coming months? Read more …
As the days have been lengthening, so markets have developed a rather different feel to that which had been established as spring blossomed, following a difficult start to the year. Shares in the UK touched an eight week low recently, with investors spooked by worsening economic data in the US (jobs growth there was way below expectations), growing evidence of the slowdown in China and seemingly rising expectations of Britain voting to leave the European Union.