It’s never been easier or cheaper to set up different accounts than it is now, be it a pension or an ISA. However, it has also never been more complex in terms of the rules, regulations and options available. So, why work with a wealth manager?
Deciding to contribute to a pension is easy enough, but when it comes to choosing from literally thousands of different investments, understanding their risk and other implications, keeping track of allowances and thresholds, and keeping everything tax-efficient, it becomes another beast altogether.
Working with a wealth manager is an excellent way to avoid the complexities of managing your pension portfolio or other investments yourself, making sure that your money works as hard for you as possible. It allows you to relax and focus on what you do best, knowing that your wealth is in trusted hands
Here are five key benefits of working with a wealth manager.
1. Building your plan around your life
At the outset, a good wealth manager will take the time to understand the goals that are important to you, so that they can build a plan around the life you want rather than you having to build your life around the money you have.
Maybe you want to retire at 55 or fund your children through private education and university. You might want to buy a holiday home somewhere. Or you might just want to live a comfortable retirement with all the little luxuries you’re accustomed to. Whatever it is, your wealth manager will ensure it is at the centre of your plan.
2. Reducing the amount of tax you pay
Reducing the amount of tax you pay is one of the most obvious benefits a wealth manager can bring. There are many different tax allowances and reliefs available – from the simpler pension and tax-free ISA allowances to the lesser-known capital gains tax and other income tax reliefs – and it’s surprising how few individuals make best use of these tax allowances.
A good wealth manager can also provide advice on more complex tax scenarios, such as Inheritance Tax and Estate Planning and using offshore bonds for especially wealthy clients to defer tax and create an environment which may allow for greater growth.
Structuring your financial affairs to minimise tax paid in light of your personal circumstances can make a significant difference over the long term. It is all well and good knowing these different allowances exist, but ensuring they are suitable and relevant to each client takes a deeper level of knowledge and experience.
3. Helping you grow your wealth
A 2022 study by Vanguard found that investors with a financial adviser on average earned about 3% per year more than those without an adviser.
That figure may not seem like a lot, but that 3% growth on a £600,000 pension pot adds up to a tidy sum of £18,000 extra per year. With compounding interest, over a 10-year period that would become just over £200,000 of additional growth (not accounting for inflation) compared with a DIY investment approach.
A robust and astute wealth management firm will build portfolios that are designed for inflation-beating returns. Your wealth manager will work closely with you to ascertain the right level of risk and return appropriate to your plan, and our investment team will nurture the portfolio to maximise growth and income.
They will also keep you updated and level-headed during any market downturns. As a DIY investor it’s very tempting to pull out all your money when the markets are tumbling, but doing so can lead to irreplaceable loss of capital. Experienced wealth managers see through the short-term noise and stick to the plan. They certainly will not get every decision right, but following a robust investment process will help avoid these bigger errors.
4. Dedicated expertise and clever, creative solutions
Wealth managers have access to a wide range of solutions, products, and industry expertise which allows them to tailor your wealth and investment strategy to meet your needs and goals.
At Tideway, we are independently owned, which means that we have access to the whole of the market and aren’t beholden to selling or favouring specific products. Our in-house investment management team works with over 55 fund managers who all fulfil different objectives. This allows us a huge amount of flexibility and creativity, putting together the perfect balance of tax wrappers and investment vehicles to give your portfolio the best chance of success.
5. Your wealth manager will keep you on track
Our lives change as they go on – that’s an unavoidable fact. People are born, people die, people separate, and goals and ambitions change. A vital part of the wealth management puzzle is the ongoing service that ensures your plan stays relevant and up to date.
Regular reviews are essential for capturing any changes in your plans or goals and ensuring that your plan remains achievable and appropriate to your needs. Not only that, but the rules and legislation around pensions, investments, and taxes do change with relative frequency.
When those changes do come about, we can act as your sounding board and provide guidance and insight on the best course of action. It’s our job to keep your plan on track – your job is to enjoy the life that having a wealth management plan in place allows you to lead.
What next?
If you feel you would benefit from speaking to a wealth manager, please do get in touch with us.
Either give us a call on +44 (0) 20 3143 6100 or fill out the form below and we’ll get in touch with you directly.
