No matter if you own a business or not, a wealth review is important to help you take stock of your situation.
The days of double digit interest rates and investment returns are long gone, so it is critical to understand how you will build wealth for your future.
The starting point is a wealth report. A simple summary of all of your assets, such as property, shares, investments, and your business, as well as personal savings and cars or artwork for example. Any debts or loans are deducted such as mortgages, car finance or credit card debt, so that we end up with a total ‘Net Worth’ figure. Doing this often raises some key issues, such as how property is owned between spouses/partners, or whether the business is worth more or less than you think it is.
The prime objective is to know where you are right now.
It can also identify if you are at high risk, if for example a large portion of your wealth is relying on one component, such as the business value, or you are over exposed in a key sector such as property. Many clients would see 90% or more of their wealth tied up in the business and 90% or more of their income coming from it. That in itself is a high risk, even if the business is doing well at the moment, a point many more now appreciate post pandemic.
Once we have this clear financial picture we can start to identify key strategies to achieve your future plans and reduce your risk. That may mean saving more along the way, reducing personal debt rather than business debt, or even borrowing money to invest to make assets work harder for you. Inheritance tax is often one of those taxes that people ignore as it is not today’s problem, but it can lead to significant liabilities for family members and family assets having to be sold. Our experts can not only give you an idea of the size of this potential liability, but also effective ways to manage and minimize it.
All of this advice is personalised for each client, to balance their unique situation and attitudes to risk.
For many, the key ambition is to have a comfortable retirement and confidence that they won’t run short of money in later years. Equally many would see it as a failure to die rich and leave 40% to HMRC rather than pass it to their loved ones. That said, having too much is always a better problem than having too little!! Our role is to help you develop the best plan you can for the future you want.