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Financial Adviser Fees Explained

A financial adviser is an invaluable resource for expats in effectively managing your finances.

When it comes to making important investment decisions, particularly around the complexities of cross-border transactions, a financial adviser assists with analysing the pros and cons. They will make sure you understand all the tax implications and dont have the puzzle of trying to work out which option is right for you.

Lets look at how financial adviser fees work, and the added value in securing professional financial advice.

Why Appoint a Financial Adviser?

A financial adviser covers a broad spectrum of advisory services and tailors their work to your requirements.

As an overseas expat, it is worth verifying with any prospective advisers that they are experienced in the arena that is most relevant to you; for example, this might be international conveyancing, expat investment portfolios or cross-border retirement planning.

Whether you are looking to purchase property, expand your investment portfolio or need to budget for lifestyle changes, expert advice will ensure you make the right decisions!

Benefits of Working with a Financial Adviser include:

  • Confidence in future planning
  • Having professional advice about which products to choose from
  • Understanding the tax regulations and how to structure your finances most efficiently
  • Saving time and stress, trying to compare different options and understand how costs and interest rates compare
  • The ongoing support and assurance of being able to consult an expert who knows your personal situation, when making important decisions
  • Help with applications, documentation and making changes to your asset portfolio.

How Financial Advisers Earn Their Income

When appointing an adviser, it is important to ask questions about financial adviser fees and what to expect.

Fee structures for financial advisers usually depend on the type of work you would like them to carry out for you, and whether this is a one-off or ongoing relationship. Typically, this structure is divided in two different ways, and sometimes a combination:

  • Annual or quarterly fees – this structure will be relevant if you work with an FA regularly, and is typically a percentage of the value of the portfolio they manage.
  • Fixed fees – if you have a short-term project completed by your adviser, their charges should be agreed beforehand. This could involve work, such as making a new investment or setting up an annuity for you.

Understanding Financial Adviser Fee Structures

Making decisions that impact your future is important, and so too is understanding the financial adviser fee structure.

If you bank in a different currency, check with your financial adviser in which currency their fees are payable, and whether you can agree to a fixed conversion rate. If not, its worth keeping an eye on currency fluctuations, so you know whether your costs will go up or down!

A financial adviser is required to explain their fees thoroughly in advance, confirming:

  • What costs are payable, when, and how often
  • How they calculate those fees
  • How long the fee agreement will be in place for, or what scope of work it covers
  • How the costs quoted are broken down

Usually, you will need to sign and return a copy of a document explaining your financial adviser fees, to confirm that you have read, understood and agreed to them. Dont ever feel pressured into signing paperwork there, and then – good advisers will be more than happy for you to take it away to have a read in your own time, and seek legal advice if you would like to.

If youre using a financial adviser in your new country of residence as an expat, make sure you understand the paperwork, and use a local translator if this isnt in your native language.

What it Means to Work with a Financial Adviser

When youre considering different types of adviser, keep an eye out for financial advisers that are not tied to any brands, products or financial services providers. You want an adviser that provides truly bespoke advice and can recommend products or services from any provider they believe are offering the best value or the right solutions for your financial needs.

Hidden Fees Explained

There are a few hidden feesto watch out for – these are costs usually rolled into your agreements which are not visible to you. If you are in any doubt, ask for an itemised fee breakdown, so you know exactly what you are paying for.

Platform Fees

Financial advisers manage your investments for you – this can range from monitoring their growth, advising on new opportunities or risks, and recommending changes to your portfolio in line with your plans.

However, investment platform fees can be a hiddencost and are charged by those platforms your adviser uses to manage your portfolio. As with hidden fees, any reputable adviser would make sure you were well-informed not only about their own fees, but also those of the providers and platforms.

Pension Transfer Fees

If you plan to transfer a pension or even consolidate multiple pensions into a more manageable pot, there may be additional fees, such as:

  • Bank transfer fees.
  • Fees charged at crystallization.
  • Annual trustee fees
  • Early redemption fees

It is important to understand both the initial and the ongoing fees associated with pension transfers. A reputable adviser should be providing this level of information as standard practice.

Trading Commissions

If your investment portfolio includes stocks and shares, your adviser may suggest buying new shares or selling existing ones. There are lots of fees involved in this sort of transaction; broker fees and commissions, trading costs and administrative charges.

If you are unclear about charges, or whether there is a most cost-effective way to manage your investments, it is always wise to ask for a thorough breakdown of what you are paying for. This should be explained and disclosed in full by your adviser.

Key Factors to Look for in Your Financial Adviser Agreement

Reading through a financial adviser agreement, for expats who arent necessarily well versed in technical terminology, can be a daunting task. If anything is unclear, always ask for an explanation – a good adviser will never hesitate to clarify.

Your agreement should cover all the aspects of billing mentioned above, as well as:

  • What advice, practical services, and support your financial adviser is including within those fees – for example, quarterly or annual reports, update meetings or yearly investment reviews
  • What is included within that work, and the fees chargeable for any additional work requested.
  • How regularly your portfolio will be analysed
  • What level of control your adviser has – whether they need your written consent to make changes to your investments, for example. This is usually called discretionaryor non-discretionary.
  • How your legal relationship works; in what capacity your adviser has the authority to act on your behalf
  • When your agreement will come to an end or fall due for review.
  • What will happen if costs increase, or if the advisers fees change?

Financial Adviser Accreditations & Regulations

When youre managing your finances from overseas, particularly if you have properties, retirement funds or investments in the UK, it is essential to make sure youre working with a properly regulated adviser.

Never be shy about asking which accreditations or regulatory bodies your financial adviser is registered with. This is merely conducting your due diligence and making sure you are confident to pay for advice and services from this adviser. Any reputable adviser will be registered with and be bound by the regulations of the regulatory body in their particular jurisdiction at a minimum, and may possibly have regulatory permission that allows them to operate farther afield.

Different countries have different regulatory bodies, so for expats, it is well worth knowing which organisations oversee your country of residence. The supervisory authorities set out standards for how fees can be structured, how reporting must be carried out, and guidelines for members to adhere to.

For help, support and advice on any aspect of trustworthy and reliable financial support, get in touch with our team at Lawsons Equity today.

Lawsons Equity – Financial Advisors Malta

As a privately owned firm with no ties to any products or providers, accredited and regulated to the highest of standards, Lawsons Equity provides tailored, transparent advice for expats.

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licensed by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994.

Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries click here.

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.

Staying safe online with your finances

With so many people spending money online, you may be shocked to hear that cybercriminals steal more than £190,000 a day

Everything seems to be done online, from your weekly food shop to buying clothes and even the big stuff like applying for mortgages. But how do you make sure your finances stay safe online?

Its extremely important to be vigilant, although it can be surprisingly easy to slip into some bad habits which could compromise your security. Here are a few things that you could do to stay safe online with your money.

Check the website is secure

There are millions of websites out there, but not all of them are friendly. Some are created with the sole purpose of stealing your details and/or your money. Luckily, the legitimate sites know this and put in extra measures to give you increased confidence when inputting your details.

One of the things that you could look for is whether the website is secure. This is generally done through https, which will show you a little padlock in the URL bar. If youre using a modern browser, it should alert you as to whether a site is secured, not secure, or even dangerous. Its generally not a good idea to ignore these warnings.

Use strong passwords

Remembering your passwords can be a pain, but talk to any security professional, and theyll tell you that a strong password is important. Use generic ones like Password1, or even try to be clever with numbers, and use P455w0rDare extremely easy to crack. Back in 2012, an expert created a computer that could crack every possible Windows password in six hours or less by trying every combination of upper and lower-case letters, digits and symbols.

Things have moved on a lot since then, and the recommendations now are to make your passwords longer using both numbers and letters. But that doesnt mean they have to be hard to remember. For example, if youre at your desk, you could use nearby objects and todays date symbols to create your new password, such as Mug01/Dog06#BottlePhone2020. Try to use at least three words to create a strong password thatll be hard to break.

Dont use the same password everywhere

Once youve created a really strong password, it can be tempting to use it everywhere, but thats not always the best idea. While your password may be safe, the places where its stored may be compromised. This is because some cyber-attacks will go after the companies housing the information and not necessarily the individuals. Just look at EasyJet – they came under a highly sophisticated cyber-attackin April 2020, and around 9 million customersinformation was accessed, including emails addresses, travel details and even payment information.

While this attack did not impact passwords, if the hackers had managed to steal both an email address and a password, they could use this information to access any other websites or services where the customer used this combination. By having a separate password for each website or service you use, it can reduce the risk of this happening to you.

Be wary of your emails

This year, we expect to see over 300 billion emails sent daily – these are emails between friends, co-workers, businesses, and automated emails. While many of these emails will be genuine, there will be many designed to trick you into providing your personal information – these are called phishing emails.

There are three simple things you can check to avoid falling prey to these scams:

  1. Check the email address – does it appear legitimate and is it sent from the company its saying it is
  2. How the email is written – bad grammar and poor spelling are tell-tale signs that the email is a scam
  3. Suspicious attachments or links – every phishing email wants something from you, and the way they normally get this is by using malware, typically accessed by having you click a link or download an attachment.

If the email ticks these boxes do not open, reply or click on anything within it.

Check app security

Just as websites have special security measures, apps do too. A good rule of thumb is to not download an app outside of the official App Store or Google Play (depending on Apple or Android), as both these locations run safety checks before allowing you to download them.

Its also important to check that youve downloaded the official app, as there can be copycat apps designed to trick you into thinking theyre what youre looking for. Take a little time to check the review, read the description, see the last time it was updated to make sure its the right one.

Once youve downloaded the secure app, you may find they have extra security measures that allow you to unlock the app using your fingerprint or face. Provided these have been correctly implemented, this can deliver a good level of security – just make sure nobody else can access your phone with their face or fingers.

Online Security in financial services

Unfortunately, there are many scams in the financial services industry too, although there are some warning signs that you can look out for:

  • Are they backed by a MFSA or other regulatory body? The MFSA is there to protect you by authorising and regulating Malta’s financial system. This applies to banks, building societies, insurers, financial advisors and investment providers – you can search the full register here.
  • Are they a registered company? Before you do anything with your money, its worth checking that the financial services youre thinking of using are a registered company with a physical address.
  • Can you call them or have them call you? Just because everything is moving online doesnt mean a company wont be able to call you. While you cant use them calling you as actual proof, if they refuse or claim they cant then alarm bells should be ringing
  • Be very wary if they ask for security information as this is often what scammers are trying to access. Never give out your password, PIN or other personal information.
  • Dont be rushed into transferring money. Take a step back and a deep breath and think before making a decision. If it sounds genuine, then call the financial services in question using their registered telephone number and talk to their customer care team to ensure the query is genuine. This simple step could help save you from fraudulent activity.
  • If something appears too good to be true, then chances are it probably is. If youre being offered a high return for low risk, then you could be being lured in by a scam

Due to the high level of regulation in this industry, a bit of research will be able to confirm whether or not the company in question is legitimate or not.

Lawsons Equity Security

At Lawsons Equity, your security is of the utmost importance, which is why we take several measures to ensure that your information and money are kept safe.

All information you provide on our website is secured using SSL technology with 256-bit encryption. Everywhere we store sensitive information, such as bank account numbers, we use strong encryption algorithms similar to those used by the major high-street banks.

We also insist our advisers and support staff use a minimum password length and require them to use upper case letters, numbers, and special characters in your password to make it more secure. 

Like suggested above, its a good idea to use a unique password with a decent length and never share your password with anyone else.

If you have any concerns about staying safe online feel free to contact our team at Lawsons Equity today.

Lawsons Equity – Financial Advisors Malta

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.

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licensed by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994.

Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries click here.

Don’t let investing stress you out

Investing can be scary, and witnessing markets go up and down like a yo-yo can cause anxiety. It is impossible to plan with complete certainty, which can leave you feeling stressed. It’s important to remember that this stress can lead to irrational choices, which could ultimately lose you money. If you want to be a successful investor, it’s important to manage the stress and keep in control. We have pulled together a few tips to help:

Don’t believe everything you hear

Markets can fall in the blink of an eye, and media outlets can react quickly to the story, sometimes simply scaremongering. This can cause fear and stress, and some people choose to sell to avoid what they fear could be further losses. Although markets can then rise again the next day, meaning as an investor who sold, you’ve missed potential growth.

Our advice is to take everything the media says with a pinch of salt. Only follow or listen to reliable sources of news, and do your own research and figures before making rash decisions. Refreshing your Twitter feed will only create added anxiety – don’t do it!

Things change rapidly, it’s normal

If you have access to your investments online or via an app, try not to peep at them too often. Of course, it’s tempting, although it can ruin your investment journey long-term. If you monitor your success too regularly, you may start to worry about minor daily fluctuations, again leading to unnecessary stress.

It’s a good idea to limit the amount of times you view your investment performance. Of course, it is important to check. But instead of daily or even weekly, why not limit yourself to once a month? Remember, investing is a long-term journey.

Consider your level of risk

Investing always has an element of risk. Returns are never guaranteed, and there is of course a chance you could end up with less than you started with. But there are ways to reduce investment risk.

This can be done by only investing what you could afford to lose, and by spreading your money across many investments – this is called diversifying your portfolio. By doing this, the odds of losing any of your hard-earned money decrease.

Anticipate further ahead

If your investment journey is stressing you out, try to focus more on your long term goals. Why did you start your investment journey in the first place? To make more money, right? Don’t lose sight of the bigger picture.

Use an expert to ease the stress

Still finding investing stressful? Consider using an investment expert. Experts sweat the details while you sit back with confidence and watch your money grow.

Lawsons Equity can help you to pick your investments, monitor the news, analyse market data, and, if necessary, make changes to keep it on track with your desired risk level. By trusting an expert, you can de-stress in whatever way you choose, with peace of mind your investments are in good hands. Contact our team at Lawsons Equity today.

Lawsons Equity – Financial Advisors Malta

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.

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licensed by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994.

Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries click here.

Please remember the value of your investments can go down and rise, and you could get back less than you have invested.

Preserve your financial future

We work tirelessly for most of our lives to climb the career ladder, diversify our investments and build on our wealth as effectively as possible. Safeguarding your wealth to shelter your finances against risk, and ultimately find financial stability and freedom.

Many expats have several assets, from savings accounts to investment products and pension funds. Each requires a regular assessment and monitoring to ensure that your assets perform as well as possible, and are not exposed to potential losses or damage that could be detrimental to your future.

In this blog, we discuss some of the best ways to protect yourself against such risks and preserve your finances now and beyond.

Professional financial advice is the key to confident conclusions, planned around your specific investment or retirement needs. If you have any worries about the preservation of your wealth, it is imperative that you seek expert support to ensure your assets are adequately protected, ready for everything you wish to do with your life.

Consider inflation

Inflation is a component of long-term investment.  The reality of inflation will always be there. However, we can consider strategies to minimise the impact or prepare for expected inflation rates.

Here are a few suggestions:

  • Switch any long-term savings to equity. This gives you a higher potential for long-term growth and a valuation above inflation.
  • Study your tax efficiency. This is of the utmost importance to expats, especially expats who may be subject to cross-border or international tax schemes. Tax-efficient can mean reducing your liabilities, increasing your returns, and avoiding losses in the value of your investments.
  • Smart investment management. Planning is always needed to ensure expected returns exceed inflation, yet still match your appetite for risk.

If you have considered these factors and know that your plans are responsible for expected inflation, you will be in an excellent position to ensure that your assets or savings do not deteriorate in the long run.

Regularly consider your appetite for risk

Your appetite for risk is a key factor in protecting your wealth. Every investment product has a certain level of risk.

Portfolios should always be tailored to your goals, plans and risk strategies, taking into account:

  • Planned expenditure.
  • Expected changes in circumstances.
  • Required returns.
  • Costs of living.
  • Age and retirement plans.

By regularly amending your investment portfolio and balancing higher risks with higher returns and, conversely, risk-averse strategies, you may achieve maximum investment success without risk in times when you rely on your investments as a source of income.

Consider Your Tax-Efficiency

The next priority in protecting your wealth is to consider your tax efficiency and consider measures or structures which could improve your financial situation.

Taxes are one of the most important outlays for millions of investors, businesses, and families. By reviewing your tax position and identifying solutions, there may be opportunities to restructure your assets and ultimately reduce your tax liability.

Unfortunately, taxes are part of life, which affects every asset portfolio and covers:

  • Succession planning and inheritance tax.
  • Income taxes and wealth levies.
  • Capital gains charges and investment taxes.

Evaluate Retirement Costs

Many savings products and investments are selected to provide steady income streams for retirement years.

There are many options in the areas of pension schemes and funds, including:

  • Flexible access to pension wealth.
  • Lump-sum withdrawals.
  • Investment risk strategies.
  • Tax liabilities arising.
  • Fund management options.
  • Pension structures and products.

Leaving pension funds untouched can cause significant concerns in retirement. Even substantial pension pots can decrease rapidly over time and make a difference to your expected pension income and retirement standards.

Lawsons Equity often consults with clients with lucrative pension funds that are not fully leveraged. Decisions about pension investments should always be made with experienced advice to ensure that they are in line with your expected retirement age, plans and budgets.

Ensure you Seek Bespoke International Financial Advice

Expats living abroad, many with assets or properties in different nations, and potentially with assets held overseas, should always seek to implement a bespoke strategy to ensure they maximise their wealth, obligations, and inflation risks over time.

Overseas legislation is different in most countries, which affects the breadth of decision-making in financial planning. This often means you have many options.

Lawsons Equity consults with expats who need dedicated support to ensure that issues including taxation, inflation, low return on investment and inadequate retirement planning cannot damage their finances. We want to implement contingency plans to ensure that our clients’ future is always safe.

To arrange a portfolio review or consider the options available to protect your wealth, contact our team at Lawsons Equity today.

Lawsons Equity – Financial Advisors Malta

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.

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licensed by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994.

Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries click here.

Retiring abroad – What you need to consider

Retirement creeps up on all of us. We regularly see young people who believe they have years ahead of them before they need to consider investing and saving for their retirement.

Of course, having a pension is a good start, but your overall plan needs be taken into account. Do you dream of an idyllic, sun-drenched retirement or plan to spend your golden years enjoying the fast life? However you plan to spend your retirement years, you need the financial security to whatever you wish.

We have a few key considerations for you, no matter if retirement is around the corner or years away.

Why should I plan for retirement as early as possible?

If you are not sure of your retirement plans or in which country you want to retire, that does not mean you can’t start making sensible decisions now.

The earlier you start laying the foundations for retirement, the better. It’s as simple as that. Many people believe they can rely entirely on pension products. However, if you add over 10 years of savings to the same pot, you will have a much larger fund when your retirement years arrive.

You should also consider how your retirement plans might change. For example, a substantial nest egg will make it much easier to:

  • Travel or relocate.
  • Decide if you would like to retire sooner.
  • Cover unexpected costs and future medical expenses.
  • Have fun!

The ideal position to be in is to have saved enough for your retirement plan to do all the above. By seeking professional and tailored financial advice, you will be in the best possible situation to get there.

The more time you have to allow your savings to flourish, the greater the chance to see higher returns and increase the size of your nest egg.

Do I need to amend my pension if I choose to move abroad?

Whether you are already an expat or plan the big move after retirement, it is important to seek professional advice, as there are a few considerations that will affect your retirement if you decide to move abroad, including:

  • Tax-efficiencies and rates on your particular pension – which may change if living abroad.
  • Deciding which source of income will you use for general living expenses once retired.
  • Considering currency exchange rates and how they could affect your pension if it remains in your home currency.

These are just a few points that can affect the retirement strategy for you upon moving abroad. Working with a wealth manager with skills tailored to your needs is crucial to understand your pension options in your home country and wherever you plan to retire.

Which parts of retirement planning do I have to consider in later life?

Only a few years of carefully and professionally managed investments and proactive decisions could dramatically change your financial situation ready for retirement.

Whenever you sit down to reassess your retirement, even if the time is nearing, it’s essential to think about:

  • The age at which you want to retire, and whether you will stop earning completely or have other income streams.
  • What is the total retirement budget you currently have, and what amount do you want to have when you retire?
  • Consider your options when it comes to using your assets, capital and investments to increase your total nest egg.
  • How and where are your savings currently held, and are their products or investments on the market with higher returns or improved tax exposure that would immediately increase your retirement fund?

The key to successful financial planning is to assess where you are and what you need to get where you want to be. Because even if you have already retired, this does not mean you can’t change your plans and figure out how to adapt your wealth management strategy to suit your lifestyle needs.

All this consideration can seem overwhelming, but is so important. Most people are retired for over 30 years, so it is crucial to invest your energy and money in professional and tailored financial advice.

If you are looking into your retirement plans and options, and would like professional advice on creating an all-encompassing strategy to ensure that you achieve your pension goals. You can contact the Lawsons Equity team to arrange a free consultation with one of our international wealth management experts.

Lawsons Equity – Financial Planning Malta

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.

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licensed by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994.

Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries click here.

Intergenerational Wealth – Securing your family’s financial future

What is Intergenerational Wealth Transfer?

We spend a lifetime generating wealth and assets, and it is therefore important to ensure that we pass wealth on to our next generation and beyond. The passing of wealth from one family generation to the next is known as intergenerational wealth transfer.

It is becoming more important than ever to consider succession and legacy planning as part of your overall financial planning strategy. Below we explore some of your options:

Intergenerational wealth transfer can be a huge issue for all family members concerned. If done well and executed properly, it can make a real difference to the financial position of the recipients. If misjudged or poorly handled, it can cause enormous issues, conflicts and resentments that are never forgotten nor forgiven.

Financial implications of Intergenerational Wealth Transfers

One aspect that should be thoroughly considered is the impact on family members, particularly the next generation, as parents think about selling up or passing down a business and entering retirement.

It is important that children are prepared to deal with this process, not least, so they are aware of how they may be affected and what may be expected of them. For instance, children may be expecting to receive a certain amount of money from their parents – particularly those who are selling a business – and end up disappointed, or on the other hand, may not feel responsible enough to take over a business.

Conversely, they may not be expecting to receive anything, and are therefore not equipped to deal with a substantial windfall. Transparency is key when it comes to generational wealth.

Contributory factors of intergenerational wealth transfer management

For those approaching, or in, retirement, it’s important to have frank and open conversations with children about expectations, and whether children have the knowledge and understanding to manage financial matters and how they feel about inheriting a business and/or wealth.

How to deal with approaching retirement

Many families experience a jaw drop moment when their children are exposed to what their parents have been able to achieve financially. Many want to learn from their parents to be in the same position as them in the future.

Although, it is important to remember that we work our whole lives to provide the best for our family and leave behind our legacy. Although you should not feel as though your family are solely reliant on you for their financial situation. It is important to teach your children work ethic, and not simply let them believe they can fall back on the bank of mum and dad. After all, it’s called legacy planning, with the idea of leaving behind a long-lasting legacy of wealth to last your family generations to come.

Expressing financial wishes

The best approach to help your children establish a strong financial foundation to prepare them for intergenerational wealth transfer, is to introduce them to your professional advisers as soon as they reach early adulthood. This can give them comfort knowing that they have someone to turn to for financial advice, and piece of mind someone is there to support their finances with their best interest at heart, should you no longer be around. Open communication and expressing your goals will also ensure your family is all on the same path to success. This can also squash the possibilities of conflict when managing intergenerational wealth after your passing.

Some questions you should ask yourself before starting the intergenerational wealth transfer planning process include:

  • When did wealth enter your life, and how do you imagine this timing influences your values and family relationships?
  • What impact does affluence have on your life and the lives of your next generation?
  • What was the key to success in creating wealth, and how might telling this story to your future generation be helpful?
  • What is your biggest concern in raising your children or grandchildren with affluence?
  • What conversations (if any) did you have with your parents about money and wealth growing up?
  • How did your parents prepare you to receive wealth, if you did?
  • What lessons did you learn from your parents about money and finances you would like to pass on to your heirs?
  • What family values would you like to pass down to the next generation, and how do you plan on communicating this family legacy?
  • What concerns do you have about your adult children when it comes to inheriting and managing the family wealth?
  • How can you help prepare your beneficiaries to receive wealth and carry on your family legacy?

The passing of wealth between generations

Many children who are set for vast sums of inheritance can end up becoming over-reliant on their expected windfall. It is important to get the younger generations involved in your business and finances. Teach them how to handle the wealth and responsibilities they will be inheriting, as well as equipping them with advice and professionals who can help them to make wise decisions about the wealth they generate themselves, when you’re no longer here.

Click here to schedule a no obligation initial consultation with one of our advisors.

Lawsons Equity – Financial Planning Malta

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.

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licensed by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994.

Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries click here.

Is it ever too late to start saving for your pension?

It’s never too late. You can take charge of your finances in preparation for retirement at any age. We have put together some points to consider when saving for your pension after your thirties.

We all want to spend our later life doing what we love without financial worries, right? The best way to ensure this is to start putting money aside as young as possible. But it’s not everyone’s priority in their twenties to start building their pension pot. If you didn’t manage to save in your twenties, thirties, or even forties then that is absolutely fine. It’s not too late to reach your retirement goals.

Even if you’re now in your forties, fifties or even sixties, there is still time to build a substantial retirement fund. We’re not saying it’s going to be easy to catch up, but with a solid plan in place and some real discipline and dedication to your savings, you can backtrack on your mistake to not start earlier. So, where should I start? You may be asking. There is no one strategy that meets everyone’s needs – the path you need depends on your age, finances and personal circumstances. We have some points you may want to consider if you want the pension pot you’ve been dreaming about:

Check on your state pension

The best place to start is to check your state pension. If you’ve been working all your life, the chances are you already have a pension pot. Your forties are a great time to check if you’re on top of your pension contributions. If you’re not, it’s time to catch up. As you get older and reach your fifties and sixties, it can become more difficult to catch up with state contributions.

Could you consolidate your workplace pensions?

Do you know how many workplace pension pots you have contributed to? Who are they with and how much is in each? It’s time to locate them and check how much you have saved in total. It may not be a life changing sum, but it all counts and could be consolidated into one place to make them easier and maybe even cheaper to manage.

Something else to consider is that if your financial situation is better now than in your earlier working years, you could start to make larger contributions. Saving more in your workplace pension can help boost and maximise your future pension pot.

Set up a personal pension

Maximising your state and workplace pensions is a great thing, but it may not be enough to ensure you reach your desired retirement target. If you’re between your forties and sixties and haven’t got much put aside for retirement, you need to broaden your options. A private pension will allow you to take control of your retirement and boost your savings. The best part is with a personal pension, you can choose how much you put aside, whether it’s £100 a month or £10,000 as a lump sum. The other benefit of a personal pension is that it allows you to make contributions until the age of 75, which could give you some extra time to save for your retirement.

Opening a personal pension can feel like a big job, but it doesn’t have to be. Our team is here to help you choose how much you should invest, and the risk level that suits your needs, depending on where you are in life and where you want to be by retirement age. We’ll do the hard work for you, and by this, we mean we’ll pick your investments and manage your pension continuously, so it remains on track with your investment style.

Consider upping your investment risk

If you’re now in later life and only just starting saving for retirement, it’s a good idea to think about your appetite for investment risk. It’s always up to you to decide how much risk you’re willing to take. But you may want a professional to review your financial situation, your timeframe, and your risk appetite to give you the best possible chance of reaching your retirement goals. If you feel confused and need help, it’s always a good idea to contact a financial adviser.

How much do you want to save?

As you approach retirement, if circumstances allow, you may want to increase your contributions to maximise your pension pot. Typically, the longer you wait to save, the more you may need to pay to catch up and reach your retirement goal. But don’t worry, this doesn’t mean you’ll need to put in thousands at once. A good way to build wealth for your later life is to regularly make sizable contributions. And if you can afford it, you could try and pay a bit more. It doesn’t have to be a huge increase. Adding an extra €10 or €20 to your monthly contributions could make a huge difference over time due to compounding.

Whatever you decide to put in your pension, the most important thing is to get started. If you want to ensure you live the retirement of dreams, the earlier you start, the better.

Click here to schedule a no obligation initial consultation with one of our advisors.

Lawsons Equity – Financial Planning Malta

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.

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licensed by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994.

Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries click here.

Saving with irregular earnings

If you have irregular monthly earnings, then how you save and budget for the long term is all in your preparation.

If you are self-employed or a freelancer, you will likely have irregular earnings. Meaning it can sometimes be a little difficult to save and budget, especially when most advice readily available is tailored to salaried earnings.

It’s important to find an approach to saving that works for you and your financial circumstances. This approach should be tailored to how much you are paid and when. In the long run, if you’re prepared to take a more forward thinking approach to saving, it will help you build a better relationship with your finances and not leave you in any sticky financial situations.

First, work out your essentials

Before you even think about budgets and saving plans, you need to know how much you spend on essentials. Just because you earn a different amount monthly, your essential outgoings will remain around the same each month. Think about things like:

  • Mortgage or rent
  • Utility, internet, tv bills etc
  • Travel costs
  • Food shopping
  • Insurance

Add them up and total your essential outgoings.

Secondly, work out what is left over

After you know your essential outgoings, you can work out what you have leftover each month.

Due to your irregular earnings, the amount you have left over will likely change monthly, so it is important to be flexible with your savings and take an active approach to how much you choose to save and when. You should study every paycheck so that you know how much you will have leftover after your essential outgoings have been paid. It’s a great idea to save a percentage of your leftover money each month. This is a great technique to save consistently, realistically and not leave yourself out of pocket.

Time to work out your budget

Knowing what is left is good, but without a budget it can be easy to burn through what’s left. Budgets allow you to maximise how far your money can take you.

With an irregular income, you might want to consider budgeting for your lowest monthly income, as these are the times that you are likely to be the lightest on cash. This will help cover your major costs and make it easier to increase in months when you have more money.

If your money changes significantly seasonally or on a job-by-job basis, you may want to make a budget by dividing your annual income by 12.

Think ahead

If you are self-employed or have significant seasonal changes, it is important to think ahead. Budgeting can give an idea of how long money might last, but you will also have to consider other events in the year when your outgoings may be higher, like Christmas, annual bills or birthdays.

If your income is irregular, planning for much longer periods can actually be easier than trying to condense on a monthly basis. It might be worth planning your payment pattern, for example holding back money for bills later in the year, investing more in your emergency savings, or even raising your pension payments for a few months of the year.

If one month you have higher earnings, think forward to ensure you will be comfortable all year round before splurging.

Split it up

Psychologically, it is much easier to spend money when you can see it sitting in your current account. If you fall victim to this, it may be a good idea to set up a seperate savings account.

It’s a great time to start investing as most high-street savings accounts currently offer low interest rates. But as you build up your wealth you should explore wealth management options and look to diversify your portfolio. Money makes money – but it doesn’t if it’s sitting in a stagnant account.

Set some goals

Saving to simply save can be disheartening. Why not set yourself a few goals?

You might also want to save for certain things, like holidays, new cars or refurbishment, or perhaps even put money away for your retirement. What you save for and how you save is up to you, but setting achievable goals can help you get there faster.

Build in a buffer

With irregular incomes, a cash buffer can be a lifesaver, especially as you may go for a few months without being paid or with lower pay than expected. Normally, it is recommended that people build an emergency fund that can pay between three and six months of bills. Although if you have irregular income, you may want to increase this amount to up to 12 months, as this pot is your plan B if money is slow or something bad happens.

Likewise, a substantial cash buffer could allow you to balance your monthly payments.

Find a place for your extra cash.

If you save regularly, you can build up more money than you need, which means you could be looking for somewhere to put it to work even harder. You may be thinking about investing to unlock more potential from your money.

We can take the stress out of investing and help you decide how much you should invest, and choose investment styles that fit your risk appetite. We’re here to ensure your saving and investment journey works around your irregular income pattern.

Click here to schedule a no obligation initial consultation with one of our advisors.

Lawsons Equity – Independent Financial Advisors Malta

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.

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licensed by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994.

Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries click here.

Is being a millionaire all it’s cracked up to be in 2021?

Are you familiar with the quiz show “Who Wants to Be a Millionaire”? It was launched in the UK in 1998 and is still around today. The show consists of a series of questions to be answered correctly, to be in with the chance of winning up to €1 million. But why has one million always been the benchmark for being classed as ‘rich’? Why is that the magic number to justify yourself as a wealthy individual?

Why are we striving to be millionaires?

Of course, it’s an aspirational goal. To everyone who has exceeded that magic figure, it would have been a real momentous milestone. Although a figure that would for sure change your life – it’s not always about the figure in your bank account, but instead how comfortably you can live your life – or maybe for some, live a life of luxury.

Being a millionaire isn’t about the figure, it’s the achievement and the lifestyle that comes with reaching it. But do you know what we find funny about the show ‘Who Wants to Be a Millionaire’? It’s the fact that since 1998 they have kept the same prize pot. If they had inflated the prize fund in line with inflation, it would be a little more attractive in today’s world, as we would now be playing for €2,061,689.26.

The reality of owning a million euros is you can now claim yourself as a millionaire (if you wish) and it’s definitely a sign to let you know everyone you’re pretty rich. But just how rich are you in today’s day and age?

Having €1 million in the bank is no mean feat, but it may not make you as filthy rich as you think.

You see, €1,000,000 doesn’t buy what it could have when Who Wants to be a Millionaire? First aired in 1998.

In the past, your €1 million could have bought you 14 average houses, but in 2021, that same amount will only buy you four.

What is the ‘new millionaire’?

The benchmark for being filthy-rich has changed since the 80s and 90s. One million isn’t worth what it used to be.

So what do I need in the bank to be filthy rich? What does the new millionaire look like? Well apparently, in 2021, to make it onto the ‘super-rich’ list, you’ll need to be worth at least €38million. That suddenly puts things into reality, doesn’t it?

Although there may be many millionaires and multi-millionaires, there is also a rise of billionaires, making millionaires seem like a drop in the ocean.

Do you need to be a millionaire to be rich?

Back to what being a millionaire means. A comfortable lifestyle, a healthy pension, not struggling, and being able to pass wealth down as inheritance.

Being rich is being able to spend money without having to rationalise every penny to yourself. It’s having an emergency savings pot built up, it’s financially stable, and it’s having disposable income. Do you need to be a millionaire to be wealthy? No, although it sure wouldn’t hurt!

Click here to schedule a no obligation initial consultation with one of our advisors.

Sources:

https://www.bbc.co.uk/news/business-42904875

Lawsons Equity – Independent Financial Advisors Malta

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.

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licensed by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994.

Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries click here.

Wealth building – The 3 building blocks of wealth growth

When it comes to building wealth, it is important to understand where you see yourself now and where you want to realistically be in the future. Are you an aspiring millionaire or content with a comfortable lifestyle and health retirement pot?

To one person, wealth may mean having millions sitting in your bank account. For another, it could be a portfolio of property, a nest egg, or to some, simply having enough money to no longer live paycheck to paycheck.

The key thing to understand is, regardless of your ambitions, it is important to focus on wealth growth. There are many ways to do it.

What is wealth building?

Wealth growth and saving your money is effectively the same thing. The only difference is that building your wealth seeks to generate its own income over a certain period. Fundamental wealth creation usually relies on financial planning and advice, so that is why we are here.

So how do you build your wealth?

The simplistic approach to wealth growth is:

  1. Make money
  2. Save money
  3. Invest money
  4. Repeat

Although you may ask, is it that simple? Fundamentally, that is all there is to it. However, our job is to look deeper into what’s involved to give you the best opportunity to build your wealth.

Firstly: Make money

Unless you have been born into a privileged life in which you have enough money to never have to work, you have to make money before you can grow it. This could be your salary or your side hustle. As long as you can make money, you’re on the path to build wealth.

Secondly: Save money

If you make enough money to be financially stable, you should save your money in some capacity. Not only is it wise to have an emergency fund or nest egg for a rainy day, but saving is also an excellent way to fulfil your short-term goals. Many believe that saving is the hardest step in wealth growth, but rest assured that starting is the toughest part.

Monthly budgets are a brilliant way to manage your savings. By setting yourself a personal budget, you can make sure you have small sums of money to tuck away monthly. Regular small savings can become one huge pot over a long enough period. For example, putting away £200 a month is £2,400 yearly – so after five years, you could have saved a whopping £12,000… at that’s before investing it!

Thirdly: Invest money

The initial mentality and habit phases to start your saving journey are difficult for some, and perhaps surprisingly not many people get to this step. The reason for this may be the complexity of investing, with an industry full of jargon and terminology making investments feel unapproachable or inaccessible for many. The second reason is cost, some believing that investing is too expensive for their position, or that you have to be super wealthy to invest. Which couldn’t be further from the truth.

Our wealth managers have made the investment journey as easy and digestible as possible for our clients.

Why is investing the final step?

The longer you invest, the bigger the rewards.

This is all thanks to the wonder called compounding. Compounding is what happens when you reinvest your profits so that that money can make profits of its own. The longer you do it, the more money you could make.

Do you have €10,000 to invest?

€10,000 is a big sum and definitely worth investing and allowing it to grow. We are here to guide you on how to invest your hard-earned money.

Think about your retirement

One option with your €10,000 is to build your retirement savings. Never think it’s too early to start saving in your pension pot. It could offer you a very comfortable retirement if you start investing now. The earlier you stat to invest the longer your money has to grow. If you have already established a retirement pot, adding such a substantial amount could significantly increase your retirement income.

Your next question may be ‘where should I put this money’? Your best option may be a personal pension. You can then choose how much you want to contribute. You depend on where you reside, you receive tax relief on every contribution you make.

Many believe pensions are complicated, but they don’t always have to be. With the help of our team, we do the hard work for you, ensuring you get the best returns on your pension savings.

Consider diversifying your portfolio

There is always a risk when it comes to investing, although there are ways to lower this risk. However, if you invest your €10,000, you should always ensure you spread the risk by diversifying your portfolio. Diversification means spreading your investments so that your exposure to any type of asset is limited. This practice is designed to reduce the volatility of your portfolio over time.

Having a range of investments can be time-consuming, especially if you have a busy schedule. This is where we’re to help. Our highly experienced team can choose the right funds to design your investment plan based on your risk attitude.

Try to think about the long-term

It’s a good idea to stick with your investments for the long run when it comes to building your wealth. The longer the investment, the more likely it will be to generate positive returns.

Take example people who invested in the FTSE 100 between 1984 and 2020. Those who held their investments for any 10-year period have had an 89% of making a gain – and this timeframe includes many market crashes, such as Black Monday in 1987 and the Global Financial Crisis in 2008-09.

In the long run, compounding can also dramatically increase your money. Deciding to invest for a few extra years could help see your pot grow larger. In other words, your initial €10,000 could really see many happy returns.

If you would like further no-obligation advice on wealth building and investing a sum of money, our team is here to help.

You choose how much you want to invest. We will then suggest an investment style which works best for you, your desired outcome, and meets your appetite for risk. Our team do the rest. Click here to schedule a no obligation initial consultation with one of our advisors.

Lawsons Equity – Financial Advisors Malta

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.

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licensed by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994.

Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries click here.

In the United Kingdom, Lawsons Equity Limited is deemed authorised and regulated by the Financial Conduct Authority. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website.

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