Introduction to Wealth Management

What Is Wealth Management?

Introduction to Wealth Management

What Is Wealth Management?

What is Wealth Management?

Wealth, just like your health, must be carefully preserved. Your assets need to be protected against the potential threats of erosion by taxation, the effects of inflation and investment risks.

Whatever your level of wealth, there is nothing wrong in making the decision to prepare a risk aversion strategy. Risk aversion is a reasonable and prudent strategy for anyone who is sure that they already have ample assets to provide for themselves and their family into the future.

There are plenty of ways of preserving wealth in real terms, protecting against most of the uncertainties that may threaten it and allowing you to sleep at night, but the unidentified risks are a far greater threat to your wealth than tax. While tax may threaten a proportion of your wealth, poorly-identified risks can destroy it all. Risk aversion starts with asking oneself a few questions such as:

Is my job secure?
What happens if my employer goes bust?
How secure are my investments?
What happens if a company I have invested in collapses or is unable to meet its obligations?
Is my occupational pension safe?
What happens if an elderly relative has to go into residential care?
What happens if I divorce?
Do I have enough insurance?

This is just a start and you will no doubt identify others. It may not be the most motivational task but if you work through the implications of your questions and attach a probability to them, it can help clarify the issues and will form the basis of your risk aversion plan.

Our service is all about helping you with professional wealth management advice to create, build and protect your wealth and minimise your tax liability in a wealth preservation plan which we will develop and monitor over a long-term, on-going relationship.

Tax Treatment Is Based On Individual Circumstances And May Be Subject To Change In The Future.

Tax Planning Is Not Regulated By The Financial Conduct Authority.

Information Is Based On Our Current Understanding Of Taxation Legislation And Regulations. Any Levels And Bases Of, And Reliefs From Taxation, Are Subject To Change.

The Value Of Investments And Income From Them May Go Down. You May Not Get Back The Original Amount Invested.

Managing your affairs and lasting power of attorney

It should be noted that the information contained in this section relates to English Lasting Power of Attorney and there are differences between the English and Scottish system.

There may come a time when, because you are incapable of managing your property and financial affairs or personal welfare, you will need someone to do this for you. You can formally appoint a friend, relative or professional to hold a lasting power of attorney that will allow them to act on your behalf. Lasting power of attorney (LPA) in England and Wales has no legal standing until it is registered with the Office of the Public Guardian. A lasting power of attorney is a legal document that lets you appoint someone you trust as an ‘attorney’ to make decisions on your behalf.

It can be drawn up at any time while you have capacity, but has no legal standing until it is registered with the Office of the Public Guardian.

A registered LPA can be used at any time, whether you have the mental ability to act for yourself or not.

You can create two types of LPA:

– Property and Affairs LPA
– Personal Welfare LPA

Property and Affairs LPA

A Property and Affairs LPA allows you to choose someone to make decisions about how to spend your money and the way your property and affairs are managed.

Personal Welfare LPA

A Personal Welfare LPA allows you to choose someone to make decisions about your healthcare and welfare. This includes decisions to refuse or consent to treatment on your behalf and deciding where you live. These decisions can only be taken on your behalf when the LPA is registered and you lack the capacity to make the decisions yourself.

How many people should you appoint and whom?

You may not be able to check up on the attorney yourself if you become incapable, so it may be a good idea to appoint more than one person to help prevent abuse of the responsibility. Choose people you can trust to act in your best interests. You should consider how well they look after their own financial affairs and whether you can trust them to use your money to meet your needs.

Depending on the complexity of your property and financial affairs it may be a good idea to get advice from a solicitor before making an LPA.

You can get further advice from the Office of the Public Guardian about making an LPA.

Registering an LPA

Either you or your attorney can apply to the Public Guardian to register your LPA. The application can be made at any time after you have made an LPA.

Before the application to register the LPA is made, the people named as being entitled to receive notification of the application must be told by the person who wants to register it.

The Public Guardian will give notice that the application has been received to:

– You as the donor
– The attorney or attorneys

Your relatives will not be notified of the application to register the LPA unless you have named them as being persons who should be given notice.

Anyone who has been notified can object to the LPA being registered.

Once the LPA is registered it continues indefinitely. The LPA can be registered by the attorney after you have lost capacity.

Lasting power of attorney replaced the enduring power of attorney (EPA) on 1 October 2007. A person given power under an EPA before 1 October 2007 can still use it and apply to have it registered. This person has a duty to apply to register the EPA as soon as they believe that you are becoming or have become mentally incapable of making financial decisions for yourself.

If you have an unregistered EPA and still have the capacity to make decisions for yourself, you can make a Personal Welfare LPA to run alongside it.

Cancelling powers of attorney

Lasting power of attorney (LPA)

You can cancel your LPA if you have the mental capacity to do so. If there is a dispute about whether your LPA has been cancelled, the Court of Protection has the authority to make a decision.

A Property and Affairs LPA is revoked if you or your attorney becomes bankrupt; bankruptcy does not terminate a Personal Welfare LPA.

Enduring power of attorney (EPA)

You can cancel an unregistered EPA if you have the mental capacity to do so, without applying to the Court of Protection.

To cancel a registered EPA you must show the Court of Protection:

– that you understand who the attorney is and what powers they have
– that you understand the effect of the cancellation
– why the EPA needs to be cancelled

An EPA is revoked if you or the appointed attorney becomes bankrupt.

The Financial Conduct Authority Does Not Regulate Financial Services

Building Relationships with our Clients

We offer a valuable service to our clients and ensure that we manage their financial affairs regularly, with objective reviews and presentation of conclusions and recommendations to update needs and aspirations accordingly.

We discuss all areas with you in plain simple language; we dedicate time to you, to ensure you understand the complexities of your Personal Financial Plan. We are here to listen, to plan and to protect.

It is our goal to enhance relations with our existing customers, and to attract new customers with a long term view towards:

– enhanced customer satisfaction and retention, ensuring that our good reputation in the marketplace continues to grow
– increased value to our existing customers
– increased overall efficiency

Our customer needs change over time, and technology can make it easier to find out more about you and ensure that everyone in our organisation can access information and fulfil your needs accordingly.

Introduction to Trusts

A trust is an obligation binding in a person (which can be an individual or a company) called a ‘trustee’ to deal with ‘property’ in a particular way, for the benefit of one or more ‘beneficiaries’.

What is a ‘trustee’?

Trustees are the legal owners of the trust property. They are legally bound to look after the property of the trust in a particular way and for a particular purpose. Trustees administer the trust and in certain circumstances make decisions about how the property in trust is to be used.

What is property?

The property of a trust can include:

– Money
– Investments
– Land or buildings
– Other assets, such as paintings

The cash and investments held in the trust are also called the ‘capital’ or ‘fund’ of the trust. This capital (or fund) may produce income, such as interest or dividends. The land and buildings may produce rental income.

What is a ‘beneficiary’?

A beneficiary is anyone who benefits from the property held in the trust. There can be one or more beneficiaries, such as a whole family or a class of people, and each may benefit from the trust in a different way.

For example, a beneficiary may benefit from:

the income only, or
the capital only, or
both the income and the capital of the trust

What is a ‘settlor’?

A settlor is a person who has put property into trust. Property is normally put into the trust when it is created, but it can also be added at a later date.

Is a settlement the same as a trust?

The words ‘settlement’ and ‘trust’ are sometimes used in place of each other, and to describe the same thing. For tax purposes, the term ‘settlement’ can have a wider meaning and can include various other arrangements and agreements.

The Financial Conduct Authority Does Not Regulate Taxation & Trust Advice.

What happens if you don’t make a will?

Everything you leave when you die, less anything you owe, is called your ‘estate’. A will sets out what is to happen to your estate. It is a legal document which, although it can be changed after your death, will normally be followed as written.

Dying without a will (called dying intestate) can cause unnecessary hardship for your survivors:

– Delays would be incurred in trying to find out whether or not you did in fact leave a will, and in tracing your possessions.
– Delays would occur in the necessary formalities required before your estate can be distributed.
– Your next of kin will usually be appointed to sort out your estate, and he or she might not be the best person to do the job.
– The law dictates who will inherit your estate and in what proportions.

The rules do not recognise unmarried partners (although a partner may be able to make a claim on your estate):

– The law may require legally binding trusts to be set up. These may be unnecessarily restrictive and expensive, especially where only small sums are involved.
– There may be inheritance tax on the estate which could have been avoided.

Another very important reason for making a will is so that you can decide who you want to look after your children if you have a young family. If you do not make a will, your possessions will not necessarily be passed on in the way you would choose. This is a particular risk if you live with an unmarried partner. (Inheritance Provision for Family and Dependants) Act 1975.

The Financial Conduct Authority Does Not Regulate Inheritance Tax Planning and Will Writing.

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