Financial planning is not simply about finance. It’s about you. Your aspirations, your needs and your goals.
Having the right financial advice will have a profound impact on your quality of life. ima is supportive of goals based investment planning. If you don’t know where you want to go, how can you know when you get there?
We believe that our clients should set their own goals. Our role is not to tell you what you want, rather to help prioritise your aspirations and to work on a plan on how to achieve them.
From the outset we will agree a strategy that best suits you. This is tailored to you and you alone, ‘one size fits all’ financial planning simply does not work.
We are able to advise on the most appropriate invest ‘tool’ to achieve your required outcome, and will always have full consideration to your taxation position and seek to maximise your tax efficiency along with looking for best returns that fit within your outlined attitude to risk.
Our expert advice will ensure that our solutions are right for you and that you have all the information you need to make a clear decision.
What does investing mean?
Achieving a good return on our money is something we all aim for. So when we invest we do so with the expectation of generating income or capital growth.
For most styles of investing the returns will not be guaranteed and can be affected by market conditions. Secure returns are normally offered by investing in areas such as cash and are usually available from the Bank or Building Society.
Investing money to achieve a specific goal is normally considered to be a medium to long term strategy, e.g. planning for retirement.
Depending on your circumstances this can be achieved by investing on a regular basis, usually monthly or annually, or by investing a lump sum.
The value of the investment and the income they produce can go down as well as up and you may not get back as much as you put in.
The value of pensions and the income they produce can fall as well as rise. You may get back less than you invested.
Understanding your needs and requirements
Investing in what is best suited to you means we need to understand more about you. For instance, what are you investing for? Do you have a goal in mind? What is your investment experience?
We will take you through a fact find where we will ask you about your current financial situation, your investment goals and objectives.
We will also ask about your feelings concerning your investment. How you feel about risk, and your expectations, are important parts of getting the right investment for you.
We will consider your tax position to check that you are using any appropriate tax relief and/or allowance entitlements.
We are all concerned about financial risk i.e. the risk associated with investing in certain investment types and the potential returns from those investments.
Investment returns are not usually guaranteed and any investment strategy brings with it the potential for loss. Each type of investment carries a different level of risk.
An example of this is investing money with your local bank/building society. Currently returns from these are low because the Bank of England base rate is at a record low.
Inflation is currently higher. For example, if you are earning 0.5% p.a. interest on your bank account savings and inflation, which is the measure for the standard of living, is around 4% p.a., your capital invested is not keeping pace with inflation in real monetary terms. Even with a deposit account, the interest you receive may not keep pace with inflation.
Generally the amount of risk you take is linked to the reward, i.e. the more risk you take, the greater the potential for higher returns.
It is important to understand the level of risk you are prepared to take with your investment. To get your view on risk we take you through a risk profiling tool which involves you answering 12 specific questions which will help us to understand your overall willingness to take risk.
Your capacity to take risk
Your attitude to risk is only one factor in determining your risk profile and a suitable investment strategy.
Potential loss must also be considered in relation to your financial objectives. We will help you to understand what level of potential loss you could afford and feel comfortable with. This is known as capacity for loss. It is important that you understand the potential risk of any investment and the financial impact this may have on you.
Your attitude to risk and your capacity to take risk may differ. For example, you would like to invest in an adventurous way with your savings to maximise the potential growth, but your savings are your emergency fund and you cannot afford to lose any of their value.
On the other hand, you may be young and saving for your pension and can afford to take more risk as your investment has a longer time to recover from any downturn in the market.
It is important that you understand the potential risk of any investment and the financial impact this may have on you.
The value of the investment can go down as well as up and you may not get back as much as you put in.