How can a holistic financial health check help you to achieve your life goals?

A holistic financial health check gives you and your planner a thorough understanding of your own personal finances and those of your business. It’s a comprehensive service that will dig deep into lots of different areas of your life and finances. You can then identify the risks that threaten your financial stability and the opportunities available to you that could help you to achieve your goals sooner.

Because of this, it’s often one of the first things you’ll do when you start work with a lifestyle financial planner.

But what exactly does that mean for you? Read on to learn more about what will be included in your financial health check and how it could benefit you.

Cashflow planning

Cashflow planning is an important part of the financial health check as it allows you to visualise how your existing assets could support you financially now and in the future.

You’ll discuss the details of your current income, savings, investments, property and pensions, as well as key dates such as your anticipated retirement date and when you expect to sell your business. Your planner will enter this information into the cashflow planning software, which will produce a visual report showing how your net worth could change over time.

As you can see in the example we’ve mocked up below, this can enable you to predict whether you are on track to achieve your financial goals and identify any potential shortfalls in income.

The cashflow planning software can also model different scenarios to see how they could affect your wealth.

For example, if you were to sell your business tomorrow, how would the outcome differ from selling it in 10 years’ time? This might mean you can afford to stop working sooner or enjoy a higher retirement income than you imagined.

From this, we can create a financial plan that aligns with your values and goals and addresses any challenges that might crop up.

Investment planning

Your investments could play a key role in helping you to grow your wealth in order to achieve your goals. You’ll discuss investment options with your planner to make sure your portfolio is balanced according to your specific needs.

As part of this, your planner will speak to you about your attitude to risk. Understanding how you feel about the risk that investing presents will help your planner to craft a portfolio that is suitable for you. Remember that even though you need to manage risk carefully, taking too little risk can also be damaging as it could mean that your investments grow more slowly, jeopardising your ability to hit your financial targets.

You may wish to discuss the possibility of corporate investing. This can be a helpful and tax-efficient way to use retained profits in your business.

By reviewing your investments carefully in this way, you can create a portfolio that is more likely to help you achieve your goals.

Retirement planning

Your retirement is an important financial milestone. As such, your financial health check will cover this in detail to make sure you are on track to have enough income to support the retirement lifestyle you desire.

Your planner might review any pensions you have already set up to ensure they are performing as expected. They may suggest steps that you could take now to boost your retirement savings, such as making the most of your Annual Allowance, using “carry forward”, and tax relief.

In addition, your planner might speak to you about how to make sure you are eligible to receive the maximum possible State Pension to boost your retirement income.

Tax planning

As a business owner, your personal tax position might feel difficult to separate from that of your business. Your planner can help you to simplify your tax liabilities and ensure you are taking an income and investing tax-efficiently.

This might mean reviewing how you contribute to your pensions to maximise your allowances. If you’re the director of your own limited company, pension contributions made from your company’s pre-tax income are an allowable business expense. So, saving into your pension could enable you to reduce your Corporation Tax liability.

You might also discuss the most tax-efficient ways to extract profits from your business. With several options available – including taking profit as dividends, salary, or as pension contributions – the decision you make can have an effect on both your business taxes and your personal tax position.

Improving the tax efficiency of your investments, income, and savings can be a helpful way to ensure that more of your wealth can be put towards your lifestyle and to creating a secure future for you and your family.

Financial protection for you and your business

Protecting your income and assets can be an overlooked part of wealth management. But consider how your family might cope financially if:

You were unable to earn an income for an extended period of time due to illness or injury
You required specialist care
Your business premises were damaged, such as in a fire, and you had to close while repairs were carried out.

Protection is all about making sure you have a plan in place in case the worst happens. Your planner can help you to identify the risks that you are exposed to and suggest the most appropriate types of insurances for your circumstances.

Debt management

Reducing the amount of debt that you have can be a helpful way to boost your overall financial wellbeing. This is especially true of expensive debt such as credit cards.

Your planner can help you to review the debts you have and suggest ways to reduce them. Whether that’s a mortgage, car finance, or other type of debt, they can help you to make sure it’s managed effectively to avoid it affecting your ability to achieve your long-term financial goals.

If you have business debt, it may be a good idea to make sure you have business loan protection in place. This is another area that a financial planner can advise you on.

Estate planning

As well as making sure you have enough money to live on now and in the future, your planner can also help you to create an estate plan that ensures your loved ones are looked after when you pass away.

This could include:

Writing a will
Creating a Lasting Power of Attorney
Calculating your estate’s potential Inheritance Tax liability
Making financial gifts
Writing an “expression of wish” for your pension
Setting up a trust to hold your assets tax-efficiently
Deciding if you’d like to gift wealth to a charity on your death
Discussing your funeral wishes.

Estate planning can provide valuable peace of mind as well as the more practical elements of having everything in place for when the time comes.

Book your free financial health check today

Here at Chapter3 Financial Planning, our mission is to enable you to live the life you desire by helping you to achieve your financial goals. That’s why we’ve introduced a free financial health check service.

You can book a call with us to share your current circumstances, challenges, and goals. Afterwards, you’ll receive a bespoke report with personal recommendations to help you take the next steps towards your financial goals.

Book your free financial health check today.

Get in touch

If you’d like to learn more about how we can help you to manage your personal and business finances and come closer to achieving your financial goals, we’d love to speak to you.

Say hello to us [email protected], call us 0161 541 2826 or submit a contact form on our website.

Please note

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 results.

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.

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.

The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.

The Financial Conduct Authority does not regulate cashflow planning.

Note that protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse. Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.