What goes into a financial plan?

At Schroders Personal Wealth, we believe a financial plan is one of the best investments you can make, whether it’s through a financial adviser or whether you go it alone.

Financial planning is the management of your finances with the intention to support your lifestyle and achieve your long-term goals.

A financial adviser, if you decide to use one, will work with you to create a plan that aims to improve your financial wellbeing, both now and in the future. By taking the time to fully understand where you are now, as well as where you want to be, your adviser will prepare a personalised financial plan that aims to help you get there.

You can also easily create your own financial plan without using a professional. Download our guide to creating your own financial plan to help give you confidence about your financial future.

What goes into a personal financial plan?

Financial planning isn’t just for the wealthy. Everyone can benefit from creating a roadmap that helps you meet your future goals and make the most of your money along the way. Your plan could, depending on your personal circumstances, contain a range of elements that reflect your financial needs, such as:

• Life cover, critical illness insurance and income protection that can protect you and your loved ones

• An investment portfolio and savings plan that suits your long and short-term goals, your timelines and your willingness to take investment risk

• Pensions and other potential sources of retirement income

• Investments for your children’s future

• An inheritance to pass on to loved ones tax-efficiently.

A good financial plan should be amended as your life changes. It’s a tool to monitor your progress, and one you should update to keep on track to hopefully achieve your goals.

You should review your financial plan regularly, particularly after important milestones such as getting married, buying a house, having a child or losing a loved one. At Schroders Personal Wealth (SPW), one of our key principles is to have regular reviews with an adviser, to help ensure your plans adapt to your evolving circumstances.

Use our free online tool to see how you could benefit from a financial plan.

Why do I need a financial plan?

Financial planning can have many benefits. It helps you consider your life goals alongside your financial situation, so you can manage your money effectively.

Understanding your financial position now could also help you plan for the unexpected. Being prepared for unforeseen circumstances such as losing a job, becoming ill, or even a loved one passing away, could help provide financial security when you need it most.

A financial forecast could help put you in control of your spending, cash needs, savings and investments, and so reduce stress and provide valuable peace of mind.

Your financial plan in four steps

Invest in your financial future today by following this four-step plan:

Step 1: Create a timeline

A financial plan can be a great way to create a timeline to help achieve your long-term dreams and aspirations. You probably plan many other areas of your life, such as your career and your holidays, but have you considered your longer term goals?

Step 2: Understand where you are today

Now you have set your goals, it’s time to assess your current financial situation. Evaluate your income and spending to help understand how you could make the most of your money.

When reviewing your income, take into account any bonus or overtime payments you receive in addition to your standard salary. Pensions and other sources of revenue should also be taken into account.

Regarding spending, don’t just consider day-to-day outgoings, such as your mortgage and bills. Include longer term commitments, such as car lease repayments and loan repayments, and money spent on holidays, hobbies and entertainment.

Be completely honest about your finances. This will help you understand if you should save and invest or improve your budgeting and spending habits.

Step 3: Plan how to get to where you want to be

Understand your goals and financial circumstances to hopefully complete a financial action plan with confidence. This could help turn your dreams into reality.

You could, for example, review your insurance policies to ensure you have the right protection in place should the unexpected happen.

It can sometimes be uncomfortable to talk about money and investments with your loved ones. But having a plan in place could make things much easier for you and your family during unexpected or tough times.

Step 4: Review your progress

You’ve now got a basic financial plan, which should give you more confidence about where you’re heading and whether you’re on track to get there.

Review this plan each year to help ensure it aligns with your goals and objectives throughout your life. If you’d like an expert to review your plan, or if you’re struggling to take action and identify solutions, then we’re here to help.

Is financial advice right for me?

The internet gives you access to a wealth of information and you can buy so many things online without going through a middle man. But, when it comes to something as important as your finances, it could pay to go to a good financial adviser.

Our advisers are here to help you develop a comprehensive financial plan in line with your goals and ambitions, and then outline the steps needed to potentially achieve them. Through regular check-ins we could ensure you’re on track to meet your financial goals while making the most of your money.

We’ll recommend investments, policies and services in line with your requirements and discuss any costs involved along the way. Our advisers get to know you, your job, your family, and your lifestyle to get a full understanding of where you are and how we could help you get to where you want to be.

It all starts with a free initial consultation to understand if our service could help you. There are no hidden fees or charges, and you’ll only pay for our service if you decide to take forward the recommendations we present to you in your personalised financial plan.