Life is rarely predictable

Recent events have highlighted the fragility of life – the phrase taken from Robert Burn’s poem To the Mouse ‘the best laid scheme of mice and men?’ seems particularly apt. So even with good planning, normally things don’t turn out quite as we expect.

However, that doesn’t mean planning isn’t important.

In fact, planning for different eventualities, which we call ‘scenario planning’, is an essential tool for ensuring that whatever life brings, you have the financial protection to keep life on track. We spend time with our clients considering and helping them to prepare for virtually any scenario.

But planning is not enough. Understanding is important in making good financial decisions.

Financial Decisions: Understanding charges, risks and value for money

According to research study Living through Later Life, the Pensions Policy Institute (PPI), people often struggle to understand charges, risks and value for money as they move into later life which may in itself lead to inertia and just being unwilling to make key financial decisions. So understanding is key and we need to help people plan ahead and make decisions.

According to the PII’s research, 35% of those aged 55 to 64 with a defined contribution pension have still not decided how to draw their pension and only 37% of people who had chosen to move their pension fund into a drawdown pension, giving them greater access and control, actually knew exactly where their money is invested. This is quite shocking, given the importance of fund performance in maintaining later life income from these types of schemes.

When it comes to making financial decisions, we believe these are left too late, very short term focused and not based on all the facts and the available financial options. Our view is to start earlier and to improve later life outcomes, we want to help people make good timely decisions, as recommended by the PPI.

Also, financial decisions need to be made more frequently.

Ongoing guidance & advice is what is needed

Again, the PII concluded that ‘following the introduction of Freedom and Choice, people are likely to need more ongoing guidance and advice throughout the course of their later life’. This highlights that choosing how to draw a pension is a critical decision with long term implications; this also underlines the need for financial advice through each stage of retirement.

How are we supporting clients?

At Grosvenor Wealth Management, we are addressing this challenge head on.

In 2021 we continue to deliver a range of educational webinars and publish essential reading on a range of subjects, centring on key points that need considering on what we believe are life changing events. Essentially we want to set people up so that most ‘wake up and smell the coffee’ before it’s too late.

Our recorded webinars talk through a number of thorny subjects:

• Can I afford to retire?
• How to avoid the pitfalls of a DIY Will
• Using trusts to mitigate Inheritance Tax
• The importance of Lasting Powers of Attorney
• Valuing a pension as part of a divorce settlement

So whatever life stage you are at. Take action. Seek advice. Make plans. Prepare for each scenario. Take control of your financial future. Despite what the future holds.