How to avoid a disjointed financial plan

By December 4, 2020Financial Planning

This content is for information and inspiration purposes only. It should not be taken as financial or investment advice. To receive personalised, regulated financial advice regarding your affairs please consult us here at WMM (financial planning in Oxford).

Many people in the UK have a tendency to deal with isolated areas of their financial plan, in a reactive way. For instance, suppose a couple in their mid-30s suddenly has their first child. At this point, they may quickly realise that they need a life insurance policy (e.g. to pay off the mortgage). Yet this reactive approach may not come at the best timing. In 2020, for instance, the COVID-19 pandemic has led many insurers to restrict their products and even raise prices. 

Moreover, dealing simply with this one area – i.e. a specific aspect of financial protection – can lead to inefficiencies such as the individual’s investments, pensions and tax. The result, sadly, is often a series of hastily purchased policies forming at best a disjointed financial plan which does not move you towards your goals. Here at WMM, we seek to address this via another approach called holistic financial planning, or sometimes known as “lifestyle planning”. So how does this work?


Proactive, unified planning 

Sometimes it is helpful to receive financial advice to “fix” a specific financial problem – such as consolidating a dozen pension pots scattered over a long, successful career. Yet some of the best results come from looking at your financial position/circumstances as a whole, proactively identifying problems before they come up later and bringing everything together so they all work towards the same financial goals. 

This process plays out differently depending on each client. Yet the areas we might typically map out together include:

  • Tax planning. Can any needless taxes on income, capital gains, dividends and savings be mitigated in the short and longer term? How can this mitigation be maintained if your income is expected to rise in the future?
  • ISAs. Are you making full use of your £20,000 ISA allowance in 2020-21, and if not, how might capital be deployed in a matter best suited to your goals?
  • Financial protection. Do you have an emergency savings buffer in place? Moreover, are there further measures required to safeguard your assets and income (e.g. critical illness cover and/or income protection)?
  • Cash management. Are there any optimisations that can be made with your current cash inflows and outflows? Could there be additional income streams available to you?
  • Pensions. Are your current contributions on course to achieve your retirement goals? Is it possible to improve your tax position and “real returns”?
  • Investments. Once a Core portfolio is in place aimed at delivering your chosen lifestyle plans, do you have surplus capital which could be deployed to tax-efficient investment such as Enterprise Investment Schemes (EIS) and Venture Capital Trusts (VCT)? Is your overall portfolio reflective of your attitude towards investment risk, and are there any areas of unnecessary risk which need addressing?
  • Long term care. Have you accounted for the potential cost of residential care in your financial plan? How might you start saving for this now, helping to prevent the cost of long term care eating into the estate you hope to eventually pass on to your loved ones?
  • Estate planning. Have you thought about the inheritance tax (IHT) bill you are likely to pay on the projected value of your estate when you die? How might this be mitigated via financial planning strategies such as gifting, trusts and tax-efficient investments (e.g. EIS shares held for at least two years)?



The above provides just a snapshot of the many pillars that can comprise a total financial plan. When addressed reactively in isolation, an immediate problem may be fixed – but it can lead to issues later with other areas of your financial plan. With a proactive, holistic financial plan, you can start mapping out these areas ahead of time and make provisions to help ensure all of them work together constructively towards your financial goals.

Interested in finding out how we can optimise your financial plan? Get in touch today to arrange a free, no-commitment consultation with a member of our team here at WMM.

You can call us on 01869 331469