Retirement Planning - Essential Information

Retirement Planning – Essential Information

One of the first questions I ask when a prospective new client asks me for retirement planning advice or investment advice is “Just exactly what do you intend to do in retirement?”

It’s a question that takes most of them aback. You can see them thinking “What’s he on about? I came here for investment advice and here he is asking how I intend to live out my days”.

A good financial adviser will ask these sorts of question and with good reason. Not only that, he will keep asking and keep digging. The real value to be had from a financial planner is in how much he asks and finds out at the start of the relationship and not how much he tells you.

For example, will you be at home most of the time because you get enormous pleasure from the garden? Is it a big garden or little garden? Will you be able to maintain it throughout your life or will you need to employ a part-time gardener at some stage?

So you want to travel. Is that occasional weeks away in the UK or regular world-wide travel? How far and how often? What quality of accommodation and cost? Or do you mean that you will probably buy a bicycle?

A poor adviser will just accept that you want to enjoy the garden or want to travel and not dig deeper but surely there is the need to fully understand what you have in mind, consider the cost of this lifestyle and ensure that you have sufficient funds behind you for the rest of your days. This is value based financial planning.

By understanding your lifestyle values and putting numbers to that, we can begin to put a plan in place to help you achieve your aims. You will no doubt have accumulated a mish-mash of pension policies, PEPs, ISAs, investment bonds, unit trusts etc but has an adviser ever explained to you how they fit in to your long term lifestyle planning? I thought not. Doesn’t it make more sense to have a clear strategy with a clear targeted outcome and arrange your investments and life accordingly? Not only that, investment “products” are rarely the complete answer. They may be the answer to the commission based financial adviser but your needs might be met by looking at other solutions that a fee based adviser would consider.

So, if you go along to see a financial planner to discuss retirement or investment planning and the questions asked seem to be more personal and intrusive and less money orientated than you expected, relax. It is likely that he/she is taking care to make sure that your financial situation is fully understood, not just by them, but also by you.

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