Where does a financial planner fit in?
A successful decumulation strategy should be unique to each client and must be able to adapt to both their absolute requirements and aspirations, particularly so given the increasingly severe economic impacts of Covid-19 and the invasion of Ukraine.
A financial planner can help achieve this in several ways. Firstly, the decumulation strategy should not be viewed in isolation but as one part of a holistic package of assets which should include all wealth along with other private pensions and the state pension. Taking an overall view of your finances can also have significant tax implications.
Active capital gains tax management can deliver significant savings, such as selling investments showing a loss to offset gains, now or in the future, for tax purposes. While this strategy can be beneficial it comes with some risk and timing can be crucial, as it may go against the prevailing logic of investing for the long-term.
For individual requirements a key consideration centres around any desires for an inter-generational transfer of wealth. Personal circumstances can also vary considerably for example is there still a mortgage to be repaid? Any school/tuition fees? It is important to note that this is not a static phenomenon either, circumstances can substantially change and therefore regular reviews with your Financial Planner can be beneficial.
The value of pensions and investments and the income they produce can fall as well as rise.
You may get back less than you invested. Past performance is no guarantee of future returns.
Tax treatment varies according to individual circumstances and is subject to change.
The Financial Conduct Authority do not regulate tax advice or tax planning.
