How does your Financial Planning Advice
Give me Peace of Mind?
When creating your asset allocation we have to consider a number of variables such as what will we use for projected inflation and investment returns.
This is where the cash flow forecast is very useful, because no one can predict the future, it enables us to have a better understanding of what we are trying to achieve.
By looking at the “what if variables” i.e., if inflation was higher than the market expects and investment returns lower, could I still achieve my desired outcome.
We also have to consider equity risk. It maybe a contradiction in terms but too much or too little risk can often mean that you fail to meet your overall personal and financial objectives.
Therefore it is useful to ask a number of questions that may help you when deciding on what risk you are prepared to take with your investment strategy.
 What percentage of my Portfolio do I need to meet short term unexpected expenditure (your contingency fund)?
What percentage of my Portfolio is required to fund my lifestyle over the
next 10-15 years?
Do I require a regular income or would capital drawdown meet my needs?
Are there any specific goals I want to achieve where I want to maintain capital security e.g. my retirement funds and are there any particular goals that I would like to achieve where I can afford to take a greater risk?
What proportion of my Portfolio is not required for my lifestyle or my goals which I can invest in riskier assets for the long term future?
What portion of my capital could I give way to my family to help them now, or create wealth for their future benefit?
What proportion of my capital could I give to causes I would like to support now or in the years ahead?
Asking questions like those above not only gives the client peace of mind, but enables you to balance your Portfolio with your lifestyle needs.
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