Financial Planning… it’s not about the money

Solomons-financial-advisor-wimbledon-top-banner

Financial Planning… its not about the money

It sounds wrong doesn’t it… in fact it can seem like a simple marketing line that’s a poorly disguised lie. However I can assure you that it (financial planning) really is not about the money. However quite obviously money is part of the discussion… eh? Is this double-talk? Let me explain.

Financial Planning is simplemysocalledlife

Financial planning is really quite simple. It is about helping you to figure out what lifestyle you want. You may find it hard to believe it, but that really is it. It is not about the money. Your lifestyle may be “big or small” but that’s your choice, it is your life. It’s about thinking about how you wish to spend your time.

Its about time

We all have the same amount of time; we all have 24 hours each day – until our last. A great financial planner will remind you that life is short. This is not meant to panic you, but to remind you. So if you didn’t have long to live, what would you do with your remaining time? Of course I have no idea how long I will live or anyone else. That’s one of the greatest gifts of life – to not know the future. As a result all plans and all financial planning are verbalised hopes and plans. Not the same as wishes, but actionable plans. Yes I might wish I won the lottery – but I never play the lottery. A plan may involve some things that cannot be pinned down clearly – I want to be a good father, available to my daughters. So I had better live in such a way and ensure I make time for a relationship with them. This has knock-on consequences and of course we juggle and compromise. When push comes to shove, your values will reveal if such a thing really is a goal or plan. There are consequences and actions. So as you can see, financial planning can get under your skin. It can be messy. It can also involve some hard choices….sometimes.

Solid foundations

It is not about how well your pension or portfolio are performing this week. It is not about your property acquisition strategy or your income. It is about you. Your life. Your values and goals. The financial plan is the architectural drawing around which the money is arranged. Changes to the plan almost certainly will require changes to the way things are arranged. Unlike a building, you can change your plan (OK you can alter a building but that’s pretty hard), but like a building solid foundations are required.

Financial Planning Week is not about products

So whilst it is financial planning week. Don’t get side-tracked by charges, products, returns, markets, asset classes. These are all fringes, trimmings. Your plan, is about you, your life. For that you need someone that you can trust as you will need to be open and honest about your life and what you want from it. The process can take time, so you need a planner that is both a good listener and patient.

Dominic Thomas: Solomons IFA

Financial Planning… it’s not about the money2023-12-01T12:38:38+00:00

When is the right time to retire?

Solomons-financial-advisor-wimbledon-top-banner

When is the right time to retire?

When is the right time to retire? Well, asking Mark Webber who retired from Formula One at the weekend would suggest at only 37. The same weekend, I watched the deeply disturbing yet beautifully written “Philomena” starring Judi Dench, who is turns 79 in a few days time, more than twice Mark Webber’s age. Both are “global stars” and have the raw natural talent for their chosen professions. They are of course completely different, perhaps as different as chalk and cheese, but what is evident is that both have a deep passion and love for their work. Both involve taking risks, Mark’s rather more obviously, but ask any actor a few questions and its pretty evident that the action of “putting yourself in the role” and being on public display is no small feat and requires considerable courage.

How about living the life you love?philomena

So retirement will mean rather different things depending on your chosen career/profession. For some it’s a lifetime choice (I’m thinking of the nuns in the film) for most of us, gradually we reach a point when it simply isn’t possible to continue at the same level, or at all. Those in the world of sport generally have very short careers, though in truth this is perhaps a sweeping generalisation, there are many that become coaches, managers, trainers, pundits or even dancers ….well they appear and occasionally win on Strictly Come Dancing. I’m reminded too of the anniversary of Dr Who (which I didn’t see) but understand that the Timelord himself got rather caught up with himself or himselves. Anyhow, my point being that retiring at 65 or State retirement age, should not be the default option. Why would you permit the economics of the State purse to determine when you stop doing the thing you love? OK I can recognise that for many, sadly, they don’t enjoy their work, but if you can break out of that into a vocation that you love, then why would you not do that for as long as you want?

Questions for financial planning week

This week is financial planning week, which I support. However invariably the majority of questions from the media are always about financial products – when can I retire? Meaning how big does my pension need to be? This is of course an aspect of financial planning, but it rather misses the point. The purpose of financial planning is to figure out what life you want, what the future might look like and how you might change it. Essentially you get to be your own Timelord… you get to decide when you pull into the pits and take the chequered flag. You get to decide what story is written and how you handle the present, past and the future. You are not following anyone else’s script, you are making it up. Financial planning is not about telling you your future, like some sort of fortune teller, but of helping you to decide what you want in it and how it could look. There are choices.

Write your own story

Thank you for reading my blog, may I suggest you have a look at the wonderful film Philomena. It is a story about one woman’s decision not to accept the story of her life as told by others. Judi Dench stars alongside Steve Coogan and both are excellent. Here’s the trailer (below)…. perhaps you will be “one in a million” and be inspired… oh and for the record Steve Coogan wrote the screenplay for Philomena.

Dominic Thomas: Solomons IFA

When is the right time to retire?2023-12-01T12:38:38+00:00

JFK – Just An Average Man?

Solomons-financial-advisor-wimbledon-top-banner

JFK – Just An Average Man?

Today is the 50th anniversary of the assassination of John F Kennedy. JFK was clearly a gifted politician, but we have since come to learn that his personal life was perhaps something of a disaster. It seems improbable that he would have become President today when one considers the farcical media “investigation” into the lives of our politicians. However, judging anyone on their habits and addictions seems a little daft to me, most psychoanalysts would suggest that we all have addictive tendencies, some more socially acceptable than others.jfk-poster

What is Wrong the world, the Banks, the…

It has been interesting to observe the media coverage and political distancing or mud throwing that has surrounded “who knew what” regarding Paul Flowers, the former Chairman of the Co-op Bank. Frankly this has now become all rather petulant and a sad reminder that most of our Politicians seem unable to confront their own hypocrisy. I remember hearing a story about a request made by The Times for responses to the question “what’s wrong with the world?” It is said that GK Chesterton (who would be 140 next May) replied quite simply “I am” which is both honest and insightful.

Beware of Assassins

JFK’s assassination 50 years ago is still a talking point and now shrouded in myth, helped a little by the nod to Camelot. Had he survived he would be 96 now. Whilst it seems likely that Lee Harvey Oswald did indeed carry out the assassination, I wonder whether we are all (myself included) just a little too eager to be assassins ourselves. I for one am rather glad that I am not armed with machine guns on my car, driving in London rather gets the better of me at times. The uncomfortable reality is that I have to come to terms with disappointment in not being who I would like to be, I am in fact an average man. Politicians and journalists would be wise to reflect on their own behaviours before dragging Paul Flowers out into the November sunshine for public shaming. Certainly it is difficult to see quite how he was deemed appropriate to head up the Co-Op Bank based upon his lack of commercial or banking experience, but I fail to see how bringing his personal problems into the public arena benefit anyone other than the gossip merchants. Mr Flowers too it turns out, is just an average man… so too is Mr Miliband and Mr Cameron. Average people doing extra-ordinary jobs.

Average Man Was  Here … or ThereTurinBrakesHammersmith

Of course my real agenda here is to find a way of linking a track from one of my favourite bands – Turin Brakes, who I had the pleasure of seeing again for the eighth time (I think) at the Hammersmith Empire on Wednesday as they tour and promote their new album “We Were Here”. I love it. However a clear old favourite and hit is a track called Average Man. If you like contemporary music, I suggest that the new album should go onto your wish list for Christmas (or earlier).

Parkland

Oh and if you get the chance, check out the film “Parkland” which is about the assassination from a more local perspective in Dallas. I blogged about the film a few weeks ago, but I understand that it goes on general release today. JFK was an inspirational leader, but frankly an average man.

Dominic Thomas: Solomons IFA

JFK – Just An Average Man?2023-12-01T12:38:37+00:00

What’s Happened to the Co-Operative Bank?

Solomons-financial-advisor-wimbledon-top-banner

What’s Happened to the Co-Operative Bank?

You may well ask what has happened to the Co-Operative Bank? which has really come under fire of late. There is a very sad tale of Paul Flowers, the Chairman of the Bank since 2010. Mr Flowers has displayed some poor judgement, which he has admitted, but perhaps what is far more serious and telling of the problems within Banking and in particular the Co-Operative, is that it very difficult to see how he had the necessary skills and experience to run a large commercial Bank.

Experience from Inexperience?

Mr Flowers is a Methodist minister and for all I know he may be a wonderfully gifted one, however a 4 year job at NatWest when aged 19 (according to the BBC report) appears to be the sum total of his Banking experience. Now before everyone blows hot and cold on this, a Prime Minister has no experience of being one until they are elected, the same is true of pretty much any political position. There is certainly a case to be made for “you don’t get experience without starting without any” however it is more than surprising that in the months following the Credit Crunch he was appointed to such a significant position. I am not blaming Mr Flowers, but one has to question the wisdom of the Co-Operative Board and of course the regulatory approving body.

Biting off rather more than can be chewed

We all have off days and I’m sure have on occasion performed below expectations when “examined under the spot-light” and I can only hope that this explains his when questioned by the Treasury Select Committee on 6th November. This is shown on the BBC website and rather speaks for itself. Mr Flowers might be a thoroughly good man (my hope if he is a Methodist minister) however being a nice or decent bloke does not qualify you to run a multi-billion operation.

Blushes not SmilesSmile Bank logo

I am not suggesting that Mr Flowers is entirely responsible for the demise of the Co-op Bank, (which includes Smile and Britannia) but losses of £781m are hard to ignore. I wonder if you can read the figures held within the Group Interim Report 2013 any better. Turn to page 12 on see the Balance sheet. I can only assume that Mr Flowers was thinking of Consolidated Net Assets of £3.5bn rather than assets of the Bank.

Now, don’t get me wrong, I am a fan of co-operatives and any organisation that attempts to apply ethics to business practice as the Co-Operative have claimed over the years….Heaven knows we could all do with a competitive retail banking sector that has some decency! So the plight of Co-Op is all rather saddening. I hope that they can be “fixed” but now run by Hedge Fund Managers, not known for their ethics, but for their asset stripping results.  To my mind this appears to be the point at which the Co-Op Bank’s core values will either shine or fizzle out, consigned to history.

Dominic Thomas: Solomons IFA

What’s Happened to the Co-Operative Bank?2023-12-01T12:38:37+00:00

What’s your pension really worth? Dispatches on Channel 4 last night

Solomons-financial-advisor-wimbledon-top-banner

What’s your pension really worth?

Michael Buerk, still working at 67 fronted the Channel 4 Dispatches programme asks what pensions are really worth. The programme which was shown last night can be viewed online. Sadly it was fairly predictable, with headline statements and little helpful information.

The Lifestyle You WantAnchorman

The programme began asking what three people expect from their pensions – in terms of the income that they need to have the lifestyle that they want, speaking to an “expert” they come up with some rather all-too simplistic “numbers” in terms of how much they need to pay in. This is what I might generously describe as an impoverished discussion. The only message that was conveyed really was that you need to figure out how much you need and start saving early.

Options and Choices

The question was posed about annuities and the appalling number of people that do not shop around for the best deal. I have every sympathy, but also wonder what it takes for people to realise that that they always have a choice. There was a sorry tale of a man that had a small pension pot (£29,000) and he bought a single life annuity from Scottish life, he then died and the annuity stopped. The family were surprised. I have to say that Scottish Life were incredibly generous in offering to alter the annuity to a joint-life annuity retrospectively. Brownie points to them. However some couples really need to think a lot more carefully about decisions that effect them both and not simply leave it to the other to “sort it out”. Which is why I do not see couples separately.

What About Proper Planning?

Despite phoning around, Mr Buerk failed to really communicate the need for expert advice – from a financial planner who would engage with the income requirements into the future and all of the options. Simply phoning around for the best deal is not good enough, it is better, but still grossly inadequate. Ros Altmann’s appearance was all too short, someone that genuinely understood the issues was not given sufficient air-time. This was typical lip service to educational information and rather more to do with headline grabbers.

Pensions Liberation is a Scam

There were further partial truths thrown in for good measure, a brief bit about pensions liberation – which breaches HMRC rules, so I would describe as illegal and yes it is possible to find someone somewhere to arrange one for the right fee (as with anything else). Frankly in the time available it would have been better to have had a separate show for this topic. Pension liberation can lead to complete financial wipe-out. It is a scam.

Pensions v Property (yawn)

So the alternative to pensions? Well thankfully the report didn’t suggest property purchases were the solution (other than the property expert). Property prices are baseless and fuelled by unsustainable debt. There was no mention of taxes, running costs, insurance etc all of which need consideration for using property as an investment. Certainly there is a place for it for some clients, but as part of the solution not the entire solution. In an ideal world your income in retirement is derived from several sources.

Education, Thinking and Planning

The programme ends with the challenge for us all to think about what we need and to consider how we are going to get there. Sadly no mention of the real “experts” to help with this process – financial planners like me. Who are not paid to sell products but to build a financial plan around real lives and real values. I wonder if the Government, regulator and media will ever get it?

Dominic Thomas: Solomons IFA

What’s your pension really worth? Dispatches on Channel 4 last night2023-12-01T12:38:36+00:00

What is the news about rising interest rates?

Solomons-financial-advisor-wimbledon-top-banner

What is the news about rising interest rates?

So, the good news is that the level of unemployment is falling…. Frankly that’s worth celebrating as it is employment that creates wealth for society (not property). However no sooner had the news broken by the ONS that inflation was also lower than expected (eh?…who are they kidding?) than the media outlets were latching onto the new Governor’s suggestion that unemployment of 7% would lead to a reconsideration of the base rate (currently at an all time low of 0.50%). The way the story has been reported you would think that we should all panic about rising interest rates.

Beware of Headlines…

Although I am not a betting man, I’d hazard a guess that some bright spark will at some point use a headline like “interest rates set to double” or “interest rates set to increase by 100%” both of which would mean that 0.50% becomes 1.00%. Now grab your credit card and have a look at the APR…. or those lovely payday loan companies who advertise pretty much everywhere..

Caution: Your country is at risk if you do not keep up repayments

Debt is still very much a problem in the UK and the Government is in deeper than any of us. So they have to tread a careful line to ensure that loans are affordable…. Including their own to you and I. So I wouldn’t panic too much about rising interest rates at the moment.

Deposits and Annuities

So those of you with savings or hoping for a sudden improvement in annuity rates are likely to be disappointed. For the record here are some of the better deposit rates around at the moment. Yes they really are that bad!

Account Type Best buy £5,000 lump sum investment
Provider Name Rate Notes Checked
 INSTANT ACCESS  Best online  Sainsburys Bank 1.55%  /
 Best High Street Bank  Virgin Money 1.51%  /
 Best Building Society  West Bromwich BS 1.60%  /
 FIXED RATE CASH ISA  Best online  Skipton BS 3.00% 5 year fixed  /
 Best High Street Bank  Virgin Money 3.00% 5 year fixed  /
 Best Building Society  Skipton BS 3.00% 5 year fixed  /
 VARIABLE RATE CASH ISA  Best online  Kent Reliance BS 1.80% 60 days  /
 Best High Street Bank  Virgin Money 1.75%  /
 Best Building Society  Earl Shilton BS 1.80% 90 days  /

As for me, I’m off to celebrate my eldest daughter’s 21st birthday. Yes I really am old enough.

Dominic Thomas: Solomons IFA

What is the news about rising interest rates?2023-12-01T12:38:35+00:00

Engaging with Financial Planning

Solomons-financial-advisor-wimbledon-top-banner

Engaging with Financial Planning

I was listening to an item on Radio 4 the other morning and was struck by the simple common sense of an interviewee. This was a “young person” who had first hand experience of the care system. She was advocating the position that young people should be more involved in the decisions about their care, that they should have a voice. She was the perfect person to promote or discuss the work of her organisation VOYPIC (Voice of Young People In Care). One of the many sensible things she said was (and I may not be quoting precisely) “… involvement is not being in the same room, but being engaged”… or words to that effect. Absolutely.

Being in the roomroomwithaview

Anyway it got me thinking about the financial planning process. A lot of people are put off by it – frankly that’s why its in such poor shape and has a poor reputation, too much jargon and too boring that the odd % here or there siphoned off you will get lost in the noise. It is only when people get involved in the process that the true value and nature of financial planning (when done well) comes to light. This is therefore experiential, not simply “paid for”. The role of a good financial planner is to tease out values, goals, hopes and fears and to reveal these within a proper financial plan. There is a degree of education and coaching involved, but most importantly the experience should be one where you are listened to and heard. It is not an opportunity to for the adviser to demonstrate how clever he or she is. It is an opportunity for him or her to truly listen and “get it”. Being in the room is not sufficient for financial planning to work well, engagement is required, which when you think of it, is really about getting you to engage with your own life.

So what are you waiting for?

Dominic Thomas: Solomons

Engaging with Financial Planning2023-12-01T12:38:35+00:00

When Can I Retire?

Solomons-financial-advisor-wimbledon-top-banner

When Can I Retire?

A question that I used to ask a lot was “when would you like to retire?” the answer that many people gave was “yesterday”. We all chuckle and then I would pose the question differently. On reflection, part of me finds it rather sad that so many people are keen to quit their work and whilst I would not wish to make too many assumptions, it would appear that many don’t actually like their work, but do it to pay the bills, looking forward to the day when they don’t have to. Of course we all might feel like this from time to time, but for me and for many of my clients, work is a joy…most of the time.

How long can I continue to work?MuchAdoAboutNothing

Take for example the world of the arts, few people actually “retire”. Last night I was at the Old Vic in London to see an adaptation of “Much Ado about Nothing” starring James Earl Jones (born in 1931 now 82) and Vanessa Redgrave (born in 1937 now 76). These two were reforming a partnership that they enjoyed in the West End performing “Driving Miss Daisy” and presumably enjoyed the experience so much that they have come back for more. The play runs to end of November at the rather lovely and thankfully spacious Old Vic.

Who decides when you retire anyway?

Of course other “professions” retire at different ages. In football you would be a rarity if you played “professionally” over the age of 40 in any league. In golf – well the Masters are all “still going”. Certainly age catches up, but there is no rule that says at 65 (or whatever the Government decide… remember that phrase) that s the time you stop. It’s simply not the case. In the world of business there is no age limit (if you run your own firm), in many professions, there are defined ages, but these tend to be those professionals that have the State determine their salary and pension.

Retirement age – much ado about nothing?

To answer the question “when can I retire?” if this is really asking when can I begin to draw money from my pension fund, the answer is currently 55. In terms of when you stop working, well that all depends on what you do and who you do it for and of course if you enjoy it… so “retirement” is much misused phrase, one might say much ado about nothing… and yes I can recommend the play.

Dominic Thomas: Solomons IFA

When Can I Retire?2023-12-01T12:38:34+00:00
Go to Top