Rather than my usual technical article, I wanted to write about my recent experience as a financial planning client.
Given our roles and experience in the financial services, I would like to think my husband and I make well-behaved financial planning clients, rather than nightmare ones.
We have a financial planner who knows our family goals and objectives, and we have been good at delegating and letting our investment accounts do the work that they are designed to – power our financial plan.
Despite this experience, a huge financial and lifestyle decision meant we had to lean on the reassurance and expertise of our financial planner more than ever recently.
For us it was buying a new family home – we were one of the estimated 428,620 UK residential property transactions that took place in April to June this year according to official figures. We even followed the trend of moving out of town. We had not seriously considered a move before the pandemic, but being at home with two kids under three as the first lockdown hit expedited matters.
We are happily settled in now, but it was not all plain sailing. A month before we were due to exchange, our own house sale fell through. At risk of losing our purchase, we had to decide whether we wanted the new house badly enough to take some financial risk to secure it, and if we did, was deploying our investment capital to make the purchase a good idea while we waited for our old property sale to complete.
This is where our background and experience held us back initially. We see in the consumer press that many people like to say, 'My property is my pension' or, 'I invest in property because that is what I know.' We found ourselves feeling quite the opposite.
We knew we had to speak to our planner to check this was not going to completely derail our financial plan and if it was comfortably possible, where we should access the additional capital we needed.
Our planner talked us through our goals and went away with his team to crunch the numbers. Knowing our situation so in depth already he put us at ease. We were presented with a clear view that our goal was achievable as well as options as to how to raise the additional funds we needed in the meantime and the implications of doing so.
These funds were invested with a future purpose and we have always felt lucky to have them, but I realise I had not quite prepared for how I might feel and react when the time came to use them. We feel confident that when our sale completes – hopefully next month – we have a plan for using them to boost our family financial plan once again.
Our tale is a happy one of the powers of financial planning – how sound advice and, most importantly, reassurance can help turn dreams into reality. It was also a reminder that all of the technical knowledge in the world is no substitute for a bit of third party reassurance that what you are doing does make sense. We can all forget that money is there to be spent rather than stockpiled.
Charlene Young, senior technical consultant at AJ Bell
