PAM Guide to Wealth Management

Developing financial planning recommendations

A private wealth adviser should now be able to make recommendations of action on how you can achieve your lifetime financial goals. They should discuss this with you and make revisions based on any concerns you may have. Although you are paying them to advise you, the relationship should be a partnership, so you understand and agree with any recommendations before they are enacted. You should use the advice, experience and expertise of your adviser, but you are not obliged to implement his or her recommendations.

In drawing up recommendations based on the financial plan, much of the information we have talked about will be considered to create, in effect, a balance sheet.

The core aspects of the implementation of the financial plan will be investment management, insurance, tax planning, succession and estate planning, wealth protection and banking. These areas are covered in greater depth in other chapters of this guide.

Prior to constructing an investment portfolio, however, two further steps need to be taken establishing your risk tolerance and an appropriate asset allocation. The asset allocation will be determined by your objectives, the time frame you have set to achieve them and your risk tolerance.

Before moving on to risk tolerance, it is important to remember that investments can be affected by unexpected events in the short term. These include changes in investor sentiment and in the economy, such as new growth expectations and rates of inflation and interest rates. The UK stock market can be impacted by events elsewhere in the world, particularly in the US and China.

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