What are the key financial planning issues in simple terms?

In our modern world, it’s too easy to overcomplicate most things in your life.

Such complexity has a way of taking on a life of its own, and it doesn’t take long before you are seemingly unable to remember your original intentions.

This usually leads to confusion and poor decision-making that moves you no closer to where you want to be.

It’s no coincidence that Simon Sinek’s TED Talk, which outlined the importance of asking “why”, has become the cult classic it has. Yet walk into any office in the country, and it’s likely the person you find is working furiously has no idea why they’re doing what they’re doing.

Sector jargon can affect your planning

Every sector has its examples of overcomplicating the simple. With its remarkable collection of jargon and abbreviations, the financial services profession does this like no other.

You may start off by simply wanting to save for your retirement. Before long, however, this goal has morphed into “accumulating a diversified portfolio providing risk-adjusted returns to enable a sustainable withdrawal for life”. Unfortunately, from my perspective, this is usually done by a well-meaning financial adviser.

This overcomplicated language affects how progress towards your goal is measured over time and, worse, can result in you being unable to relate to your plan in a way that inspires action and discipline.

I see this in all areas of the financial planning process, and we’re all worse off for it. The truth is that nearly all the issues that financial planning aims to solve are starkly simple. They’re also profoundly human, so my ethos is to return to basics and utilise simple explanations, as far as possible.

Putting your goals into simple terms helps you navigate towards them

It’s important to never lose sight of your goals and aspirations, and to prioritise these. Often, the best way to design a sensible plan is to state your intentions in human terms, not those of the financial sector.

Through my work with families similar to yours, I have found that the following are near-universal goals, stated in the first person:

• I do not want to die tomorrow and leave my family without support
• I do not want to become seriously ill and leave my family to struggle
• I do not want to run out of money in retirement and become dependent on the state or my children
• I do not want to become a financial burden on others if I need long-term care
• I want to leave a legacy to my children without it causing strife or almost half of it being taxed.

You may relate to some or all of the above. You’ll likely have other aspirations that can be expressed just as simply.

Your financial plan should meet you where you are, not have you twist yourself into its convoluted sector-specific language. Insist on this as if your goals depend on it, which they might.

Keep your eyes on the prize

Wisdom is never hidden deep in the weeds but in simplicity, which according to Leonardo da Vinci, is the “ultimate sophistication”.

Your aspirations are sufficient as they are formed in your mind, and I’ll always encourage you to keep things simple whenever possible.

I’m confident that this way of forming a financial plan will reduce confusion, improve decision-making, and increase your probability of realising your most cherished family goals.

Someone else can take care of the details and complications, but only if they’re willing to meet you where you are. Small actions taken regularly can compound into something extraordinary. I’m here to help you.

Get in touch

If you would like to talk about your financial planning arrangements, please get in touch.

You can call me on 07769 156 250.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.