Start the New Year With a Holistic Financial Plan

What exactly Is ‘financial planning’?

At NorthStar, our work is broadly split into two distinct types. Project work and financial planning work. Most of our clients start with a project of some description. This may be a pension review, setting up a new investment, retirement strategy or protection review, for example. Most of our clients come to us initially to deal with a specific issue they want resolved and to work out the best way to achieve a defined financial goal. Unlike project work, financial planning is about stepping back and looking at the bigger picture. Our financial planning service provides a comprehensive picture of your current financial position, maps out your financial future and show you how you can achieve your life goals. Financial planning can help answer some of the biggest questions in life such as when you can afford to retire, how best to use your money, you biggest financial threats and how you can best achieve your goals. It also shows how major events could impact your finances and the steps you can put in place to insulate yourself and protect your future. A Financial Plan will give you more clarity over your financial future and provide you with the confidence to achieve your goals.

We think of financial planning as being a bit like a personal trainer – helping you get financially fit. An ongoing service to get you in the best possible financial shape. We’ve written a much more detailed explanation of our financial planning service on our website which covers the background, implementation and advantages financial planning can bring.

How does financial planning work & what do I get?

The first step in our financial planning process is a thorough ‘fact finding’ process. We already know much of this after completing your initial project work but we’ll make sure everything is up-to-date and we have a comprehensive picture of your complete financial position. We’ll also ask some deeper, more searching questions that go beyond money. We firmly believe that money is but a means to an end and that understanding your real life goals is crucial to putting an effective plan in place. We’ll talk about the big picture and challenge you to think about what you really want from life for you and your family.

Once we have everything we need, we’ll create your ‘Financial Plan’. This is a comprehensive document that covers all the important areas of your finances. You can see an example Financial Plan on our website.

The first stage of our financial planning process is all about you. We document where you’re at in life, provide you with a financial snapshot of your current position and state your most important goals. Here’s an example:

The second part of your financial plan is what we call your ‘Financial Scorecard’. Each area of your finances is given a percentage score, showing our appraisal of your progress. We assess how well you are doing in relation to your personal objectives and highlight the steps you can take to improve your score. We cover 10 key areas of your financial life to produce your personal ‘financial scorecard’. Here’s an example:

Your scorecard lets you see which areas of your finances are most in need of attention and your plan provides you with the step-by-step action that is needed to improve your scores. It also helps you track your progress throughout your life as we update your scores at each review. Some of the action points within your plan may be things that you can put into action yourself and others will be things that we can take care of for you. The key thing is that you have a full assessment of where you are and the steps you need to take to get where you want to be.

The final part of your plan contains your ‘financial forecasts’. These show how your household income, expenditure and assets could change over your lifetime, providing you with projections of your future financial position. Here is an example financial forecast:

We then use these forecasts to stress-test a number of scenarios to help us work out your options. Can you afford to retire earlier, what if you lost your job, can you afford a second home, could you cope financially if you or your partner was seriously ill, can you afford to send your kids to private school, will you run out of money before you die? Each scenario we model is bespoke to your situation and will consider your specific circumstances, questions and goals. By modelling your finances in this way, we’re able to show the trade-offs you may need to make in life to achieve the things you really want.

It gives us a great sense of satisfaction when our work leads to fundamental changes to our clients’ lives. For some, this is when we tell them that they can retire five years earlier than they had planned and still be certain they will be financially secure in their retirement. For others, it may be that they can afford to travel the world for a year when they retire and still afford to pay for their parents care home and their kids at university. For many though, it’s simply knowing their finances are in great shape and they are fully in control, their family is protected should the worst happen and they saving the right amount for the future. Whatever your goals in life, your Financial Plan will show how the decisions you make now could impact your financial future and how you can best get what you want from life. You can find out more about what is covered and how our financial planning service works on this page of our website.

Is this a one-off or an ongoing service?

The most effective way to use our financial planning service is as an ongoing process. A good analogy is to think about a ship setting sail for a far off destination. Your Financial Plan is your route map, showing you how to get where you want to go and the course you need to take. But life has a habit of throwing us curve balls and not unfolding quite as we had planned. Our goals may change and sometimes we get blown off course. We therefore recommend reviewing your Financial Plan every 12 or 24 months to ensure you stay on-track to reach the destination you want. The discipline this creates is really powerful. Simply knowing you have made time to sit down with us and update your plan can bring huge benefits. This forces you to regularly take the time to reflect, review your goals, consider your progress and take action as needed.

What are the benefits?

There are a number of important benefits of financial planning including:

• Direction: You know what you want to achieve in life and how you will achieve it
• Clarity: You fully understand your financial position and what your future may look like
• Peace of mind: You sleep soundly knowing that your finances are fully under control
• Security: You know your lifestyle is safe and secure no matter what the future holds
• Control: You are fully in control of your money and always make great financial decisions
• Confidence: You can live life to the maximum, with complete confidence in your financial situation

How much does this cost?

We have two financial planning services. Our ‘Standard’ service provides full Financial Plan updates every 24 months and costs £950 upfront plus £50 per month. Our ‘Plus’ service, provides updates every 12 months is available for the same upfront cost plus £95 per month. Should you simply want a one-off financial plan, just pay the upfront cost with no ongoing charges. Please note that we are currently offering a special discounted price to our existing clients with the upfront cost reduced to just £550 for both ‘Standard’ and ‘Plus’ financial planning services.

How do I find out more?

There is lots more information about our financial planning services on our website. If you would like to find out more, have any questions or want to discuss how to get started, please contact us.