Why don’t you have a ‘Financial Plan’?

There are over 100,000 people in Britain claiming to be ‘financial planners’. But most, whether working for banks or as supposedly ‘independent’ financial advisers (IFAs), are just glorified salespeople out to put as much of your money as they can into the investment schemes which earn them the highest commissions. One study of IFA customers found that not one had what could be called a ‘financial plan’

A simple plan (see below) might consist of a spreadsheet (on computer or paper) where you lay out all the years from where you are till when you expect to die. Then you would have a series of lines with your expected income, expenses, pension savings and amount available for luxuries. (To estimate the growth in your savings you should probably do two projections – at 3% and 5%). Unless you’re very lucky, you might find out that you’re not going to be going on many world cruises when you finally (if ever) stop work. Making a financial plan can be a very sobering experience, but  you might not stay sober for long.