Personal finance panic?
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Getting proactive can be a great antidote to panic, and while our physical health is paramount, there is a lot many could be doing to safeguard their financial health too during these unprecedented times.

There is no denying that the Coronavirus pandemic represents a perfect storm for many individuals’ personal finances. Global markets have plummeted, leaving investors of all kinds extremely worried about their savings pots.  Meanwhile, the Bank of England base rate has been cut and cut again to now stand at 0.1%, with a profound knock-on effect for the interest rates savers can obtain. Governments are doing what they can to preserve our ways of life, but global recession, and perhaps even a wide-reaching reorganisation of how society lives and works, may occur. The only thing that is constant is change.

Our health is naturally far more important than our finances, but the two are of course very much interlinked. It would be facile, then, to suggest that we shouldn’t be paying close attention to our personal wealth during these troubled times. We face massive upheaval, but life will certainly go on, and we need to limit the damage this virus wreaks on our life plans.

Our health is naturally far more important than our finances, but the two are of course verymuch interlinked. It would be facile, then, to suggest that we shouldn’t be paying close attention to our personal wealth during these troubled times

Seeking bright spots

During a crisis, we need to seek bright spots where we can; we also need to feel we are doing something. The good news is that technology means we certainly can be proactive, even in “lockdown”. And, although it may not seem so in the eye of the storm, savvy individuals could eventually emerge in a better financial position.

A trusted adviser plays a critical role in heading off the most damaging and irrational (if understandable) actions investors might take, like converting “paper losses” into real ones by exiting when markets are on the floor

It is difficult to overstate the value of professional wealth management advice during the best of times, yet this is even more the case in these troubled ones. As our recent article “Self-care for investors” set out, a trusted adviser plays a critical role in heading off the most damaging and irrational (if understandable) actions investors might take, like converting “paper losses” into real ones by exiting when markets are on the floor. And it goes without saying that advisers – and the whole expertise of the institution behind them – will be working ceaselessly to insulate clients’ portfolios from the fallout (this is why I really fear for those running their own investments alone now). Investors really need a professional in their corner currently and we should be grateful that wealth management advice is technology-enabled today, through us and the multi-channel communication methods the firms on our panel have adopted.

While it is difficult to time the true bottom of the market (and especially so for the amateur), many are saying that now is the buying opportunity of a lifetime as COVID-19 has brought to bargain basement valuations many otherwise perfectly healthy companies

But what of those completely new to investing and currently sitting on cash? Well, while it is difficult to time the true bottom of the market (and especially so for the amateur), many are saying that now is the buying opportunity of a lifetime as COVID-19 has brought to bargain basement valuations many otherwise perfectly healthy companies. Markets are likely to remain volatile for some time, but if you mandate a manager to “drip-feed” money into them gradually you can smooth these peaks and troughs and then benefit from what many foresee will be a “V-shaped”, recovery. Certain sectors and companies – particularly those focused on the online economy – are poised to soar (China’s prospects are also being highlighted, perhaps counterintuitively). Significant expertise will be required to pick the winners, however.

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Wealth managers’ offerings go far beyond just running investment portfolios with professional rigour, although this is a core part of what they do. Financial planning; advice on tax, business, and inheritance; mortgages; deposits and cards are just a few everyday services available through the firms on our panel. There’s arguably never been a better time to have an informal discussion with prospective advisers, so why use a little spare time to see what one could achieve for you.

Lee Goggin - Co-Founder

Lee Goggin

Co-Founder

Best use of time

I would strongly advise against trying to become a quasi-investment analyst in a matter of days, despite us being confined indoors and the huge amount of commentary flying around. That way madness lies and a scattergun approach to investing is no way to make money. A robust asset allocation strategy with good diversification between asset classes has never been more important. Do not underestimate how complex the right recipe is and the vast resources wealth managers put into constructing their models.

You could improve your situation by shopping around for better savings rates on your cash deposits, and you should know that private banks regularly offer very much more attractive interest rates (and duration terms) than the High Street banks. Affluent individuals might also like to explore a mortgage from a private bank. They can often offer deals far superior to mainstream lenders, but they are also better able to understand the more complex financial affairs of affluent individuals. Entrepreneurs or those with uneven income streams can find “the computer says no”, quite wrongly, with the High Street institutions.

You could improve your situation by shopping around for better savings rates on your cash deposits, and you should know that private banks regularly offer very much more attractive interest rates (and duration terms) than the High Street banks

And finally to minimising tax, that most under-estimated but vitally important third strand of optimally managing wealth. The UK already had among the most complex tax regimes in the world and we can also expect a lot of change here too, particularly for business-owners. As ever, taking professional advice as early as possible determines the success of your strategy.

All in all, this is a good time to be proactive about your personal finances, but don’t tie yourself in knots at what is already a stressful time. Have our matching service take the guess work – and legwork – out of finding expert guidance, and then let your adviser take the strain of keeping abreast of all the news and wealth implications.

All in all, this is a good time to be proactive about your personal finances, but don’t tie yourself in knots at what is already a stressful time

We may all be stuck at home for a while, but technology means we can use that time get our financial houses in order. Your future self will thank you. Yet another book, boxset, cake, crossword or any other pastime can wait!

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