Will my financial security be affected by Brexit?
There’s no doubt about it now: Brexit is happening. The Withdrawal Agreement has been signed and, as of January 31st, the UK has officially left the EU. As we move through the Brexit transition period – a timeframe which could last from one to two years – individuals and businesses across the UK are trying to prepare for the unknown.
Post-Brexit wealth management: ensuring your financial security
If you’re feeling financially insecure over Brexit, you’re not alone. While none of us can predict the future, there are steps that you can take to mitigate financial risks and protect your wealth.
Our Senior Client Director, Nick Toubkin, and Joanne Leach, our Client Director in France, walk us through some of their most important wealth management tips for February 2020 and beyond.
1. Know your financial objectives
Private wealth management services and corporate planning services are designed to help you safeguard and grow your personal or business wealth. However, before your adviser can give you any advice, he or she will need to know what your financial goals are.
“As before Brexit, the key for financial security is to ensure total clarity on your objectives for your finances,” Nick advises.
Once you’ve defined your objectives, your adviser can work with you and provide you with a bespoke wealth management strategy. This strategy helps you better understand how to manage your money. It allows you to see how you can meet the financial needs of you and your loved ones or your business, now and in the future.
2. Say yes to cash flow planning exercises
Cash flow planning exercises are an invaluable tool for anyone looking to “optimise their feelings of financial security.”
These exercises focus on your long-term financial position. They take into consideration your incomings and outgoings as well as potential threats and opportunities.
Nick explains: “Cash flow planning exercises help clients understand what impact various potential scenarios might have on their wealth.” These scenarios can include anything from a fall in the financial markets to unexpected expenditures.
3. Don’t overlook the importance of diversification
While it has always been important to have a diversified investment portfolio, as we move into the Brexit transition period, diversification becomes essential.
In a post-Brexit world, “diversification across currency, asset class and geography is crucial to protect against unexpected events,” Nick advises.
He also reminds us that we should remain calm and keep the ‘bigger picture’ in mind. “Whilst Brexit is a major event in the UK, in the context of the global economy, it’s not a critical issue.”
4. Seek professional advice before you make any changes
When it comes to post-Brexit wealth management, Nick recommends seeking financial advice from an experienced professional.
“Make sure that you know the implications of any financial steps that you take”, he states. “While there might be attractive reasons to engage in a new financial strategy or arrangement, it is critical to consider how you might unwind it if required.”
Working with a financial planning professional gives you access to years of experience and industry focussed learning. It helps you avoid fear-based and ill-informed decisions, many of which can, over the short and long-term, do much more harm than good.
5. Don’t make assumptions about tax efficient investments
If you are a UK citizen who is living in – or thinking of moving to – France, it is important to discuss your assets and savings with your financial adviser.
“Generally speaking, tax efficient investments in the UK are not the same in France,” Joanne states.
She shares an example: “Income taken from UK investment bonds currently benefit from the advantageous taxes of an EU insurance Assurance Vie.” However, this may change post-Brexit, “It is likely that UK investment bonds will no longer be considered EU insurance.” In this situation, “the tax advantages of these investments will be lost.”
Feel financially secure post-Brexit
These wealth management tips are just some of the many steps that you can take to help alleviate fears and safeguard your wealth.
Ready to feel financially secure post-Brexit? To find out more, and to get the tailored advice and support that you need, contact your financial adviser or the Strabens Hall London or France office.
