Let’s be clear, Brexit is a big deal. It will have an impact across many areas of life, for many years.
The key question for us to address is how this will change financial planning? How do you think it will alter your plans, your finances and your future prosperity?
Our answer to this question may surprise you, here it is: Brexit changes nothing, when it comes to financial planning.
Why is this, why do we say this? It is to do with the very fundamental central aspect of true financial planning…
Nobody knows the future.
Nobody knows how economies are going to perform, nobody knows globally what the future holds and, most importantly, nobody knows what their own personal positions are going to bring.
In other words for financial planning to work and be truly effective, it has to cope with an uncertain future. That is why we use the word ‘true’ because the qualified financial planning methods, established worldwide and over many decades, are based on a series of steps which all work around being effective come what may.
Too many other types of financial advice or planning ‘work’ on the opposite basis of trying to second guess what is in store and map out a future based on predicting events, markets and outcomes.
This is – in our view – turning your financial planning into a form of lucky dip. Get things right and everything is fine. Get things wrong and, well, they are not fine.
So for example, this is why we worry about people who rely on their property acting as their pension. This works if property is increasing in value, as at recent levels, for a long period, and the individual can release their property at the right price at the right time. But it leaves no room for the unexpected to happen.
If ten years ago you had predicted that interest rates were going to be 0.5% for years on end, you would have been looked at very quizzically. The unexpected is always to be expected, we just don’t know exactly what unexpected things will happen or when; just that they will!
This is why Brexit has no real impact on your financial planning, because the steps and methodology you need to employ to meet your future goals, will be the exact same steps and methodology as they were a month before the Brexit result.
Those steps include cash flow forecasting your future income and expenditure needs. Having an adaptable and flexible approach (and response) to changing economies and markets, with constant reviews of how your actual financial plans (your pension savings and so on) need to change. This could be either in terms of the amounts being saved or the investment mix.
These aspects will always be the case and you will always need to be conducting your financial planning in this way, so Brexit, however ‘big a deal’, is just another event or occurrence in the constantly shifting set of events and occurrences, which you need to adapt to as appropriate.
As specialised and qualified financial planners, Penguin Wealth are geared up to ensure that our client’s planning isn’t affected by the unexpected.
If you are unsure how your planning would be impacted by the unexpected, or if you have no planning in place at all, then please email email@example.com or phone 02920 450 143 and we would be more than happy to have a chat.