Is this the right time to buy a house? Or how about investing? And should I keep paying into my pension? How much should I be saving every month? As we discussed earlier this week, money anxiety is inevitably at an all-time high right now and the stream of questions that accompany this period is never-ending. Maybe you’re working from home and juggling childcare meaning you don’t have the time to think about your next financial steps; or perhaps your business is affected and you’re looking after elderly relatives so booking an appointment with your bank isn’t high on your list of priorities; maybe you’ve been furloughed and unsure of what you’re entitled to and feeling paralysed with uncertainty. To keep you company on your lunch-break, and answer the questions you have probably been asking yourself, we have caught up with Jon Ashcroft, independent financial adviser at Ashcroft Wealth.
Tell us a bit about yourself and how your career as a financial adviser began.
Although not born in Wales, I have called it home for most of my life and I now live in Cardiff with my partner and our two dogs. We love the ability to experience so much variety that South Wales offers. You can be by the sea, in a forest, on top of a mountain or in a city-centre restaurant without having to go further than 25 minutes. Throughout my working career, I’ve always loved to work with people and to ultimately find a solution to their problems. I started in a guitar shop when I left university and found my way into finance 15 years ago. I realised that I really wanted to help people with their finance problems and trained to be a financial adviser and since then, have never looked back. Over the years, I worked for big firms, small firms and transitioned from being self-employed to owning my own business around 8 years ago.
In light of lock-down, more and more women are concerned about money. What is your advice for anyone being placed on the dreaded, and much mentioned, furlough?
The current situation is very stressful, whether it be worries about your family’s health, your income security or just the claustrophobia of lockdown. There are plenty of areas you can try to work on during furlough to try and help your situation now and for the future, it’s about focusing on the things you can control. From a financial advice perspective, using the extra time at home as an opportunity to take control of your finances is something everyone can do and can give you a real feeling of release.
Firstly, I would suggest sorting out your financial paperwork. Yes, I know this is not going to be fun, but trust me, once you’ve done it you will feel so much better by knowing what, who and how much you are paying for things. The cornerstone of all financial planning is getting a good understanding of what comes in and what goes out of your household. You can then check if you are overpaying for your utilities, telecoms and insurances or if you are spending more than you thought at the supermarket or Homesense.
I would then suggest, if you have a mortgage or you rent and feel that you need a bit of breathing space, you should talk to your mortgage company or landlord to discuss a mortgage payment break or rental holiday. There are many factors to consider with taking a payment break, but you should always try to talk to your creditors in the first instance. I’ve already had virtual meetings with new potential clients who want to use this time to focus on their longer-term financial futures. Whether that be having the right insurance in place to protect their family, taking pension planning seriously, or getting to grips with investments, we all have financial goals.
What do you think the future holds for small-businesses and self-employed workers?
It’s certainly going to be a challenging world of change for small businesses. As a small business owner myself, I have had to adapt to not meeting my clients face to face and seen an initial drop in income. However, I have also been keen to adapt and try to add value to the service I offer by embracing tools for video meetings, updating clients on their individual circumstances to try to give some peace of mind when the economic news can be very sensational. I’ve also used the time to work on my business, to try and improve how I did things previously and think about where opportunities might lay in the future. Although it will be tough, those who innovate and adapt to change whilst staying true to their core values have the best chance of having the strongest future.
In terms of future-proofing, what initial steps do you recommend for anyone trying to sort out pension plans and not knowing where to start?
To every new client I meet who wants to look at pension planning , I ask the same question, what does retirement look like to you? This can sound simple, but when you think about it – what age do I want to stop work? how much money do I need to live off and what do I actually want to do in retirement? – it is quite a lot to think about. However, without having thought about these questions, it’s very difficult to know how much you need to start saving. I am always very open about the fact that pension planning is daunting and the subject matter can be rather dry. This is why I’d always advise speaking to an independent financial adviser – it is not a one size fits all situation. It’s a complex area and taking the advice off a friend or the internet can often be the wrong thing for your particular circumstances. Reputable advisers should offer an initial consultation free of charge to assess how they could help before quoting for their services. They will be able to look at anything you have in place already, where it is invested and what it will provide in retirement. From there, they can look at how to make sure you start on the right road to the retirement you have chosen, and help you adapt your plans along the way as life is never straightforward.
Women are sometimes excluded from financial narratives including investments. How can one dip their toes into investment?
Investing can be a fun way to try to grow your money whilst also giving you the ability to support companies that foster a world you believe in, just be prepared for a few bumps in the road and make sure you get your financial foundations right before you start. Investing is all about risk and your capacity to lose money against the potential to make higher returns. It can be intimidating, yes, but this is where good advice really comes into its own. An adviser will help you realise what your feelings are around risk and what you need or want to achieve with the money you are investing. They can then help you choose the right investment type for your circumstances and help you pick the type of investment strategy that fits your preference.
For those who want to DIY, I’d say your budget is the most important factor. If you want to start investing a small amount monthly, there are many apps available that will you give a basic ready-made investment fund linked to stocks and shares where you don’t have to spend hours think about what companies and type of asset you invest in. If you want more freedom to pick your own investments, other companies will allow you to tailor your own portfolio and buy and sell as you please. You can these use your money to invest in areas you see as the future or even to meet your social and ethical beliefs. Whatever route works for you, just ensure that you have an adequate ‘emergency fund’ before you commit to putting any of your money at risk. Events like we have seen this year show the vital importance of having a financial cushion to fall back on in times of need. I’ve always said that investing in your financial future gives you freedom of choice in the future. If you have the right financial product for the situation you are in, it enables you to choose when and what you do. So whether that’s the investment you have built up to buy the house you want when it comes on the market, or the pension that allows you to retire at 60 rather than waiting for the state pension to kick in, financial planning can unlock the future you want.
So here you have it; time to start planning, perhaps chat to a financial consultant and start taking the steps for the financial future you want, however it may look like. As always, before taking any sort of financial steps, chat to your advisers, do your research and shop around for the best solution to suit your needs. We certainly will and hope you do too.
The Squiggles Team X
Ashcroft Wealth is a trading name of 2plan wealth management Ltd, which is authorised and regulated by the Financial Conduct Authority. It is entered on the Financial Services Register (www.fca.org.uk) under reference 461598. Registered office: 2plan wealth management Ltd, 3rd Floor, Bridgewater Place, Water Lane, Leeds, LS11 5BZ. Registered in England Number: 05998270.