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ISA Investing

Insight into the Personal Financial Plan of an IFA

IFA Yvonne Goodwin explains how she is managing her money at the end of the 2011-2012 tax year

Yvonne Goodwin, 5 April, 2012 | 12:34PM
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Yvonne Goodwin, IFA and managing director at Yvonne Goodwin Wealth Management, shares her personal financial plan with Morningstar as part of our ISA Mania series.

There are many matters to attend to as the 2011-2012 tax year comes to a close. Not only do I have to attend to personal financial matters, but I also have lots of work to do with clients, and I have a business to run.

In terms of my personal investing and saving, I know as a professional financial planner that it’s easier to spread sensible tax planning and savings issues throughout the year. For example, ISA contributions should be made throughout all 12 months of the year instead of right before the year-end deadline on April 5th.

Personally, I will be making the maximum ISA contribution for the 2011-2012 tax year, putting £10,680 into the following funds:

- M&G Global Basics (Rated Gold)

- Newton Asian Income (Rated Silver)

- Ignis Argonaut European Income (Rated Bronze)

- Invesco Perpetual Global Equity Income (Rated Bronze)

I am choosing these funds because my goals with my money are long term – when I retire (which won’t be for an incredibly long time yet) I will be able to switch on a valuable income stream which will be tax-free. Of course, I will monitor the performance of these funds with their peers and won’t hesitate to switch if I feel it is appropriate. In choosing these particular funds I am looking at volatility, past performance against peers and the global economic climate.

Currently, in my SIPP I am accumulating cash because I am hoping to make a commercial property purchase in the not-so-distant future. I am currently paying rent to a landlord when I would much rather be paying rent to my pension fund!

Moving onto business matters: this is the time of year that I also update my financial plan – I first look at whether I am on track with my personal financial objectives and then analyse whether my business is aligned with those goals. Do I need to trim any costs within the business? How many new clients could I take on? Should I increase fees?

I always say to every business owner I meet, whether they are another financial planner or a client, that until you’ve started your own financial plan, how the devil can you shape your own business plans? You will have no idea what you want your business plan to look like and whether it will enable you to achieve your goals.

So with that in mind, I analysed my key business ratios: I asked “Was last year more profitable than this year, and if so why?” This is important to address because any money being spent unnecessarily within the business means less for my own financial future. Having read that back it does sound awfully selfish, but any good financial planner should practice what they preach and focus on making the most of their business – provided that business is crafted with the clients at the centre of the universe.

As far as my clients are concerned, I have been working with them in a generally steady fashion throughout the year, trying to avoid the year-end rush that many advisers face. We have been going over their financial plans at their annual review/forward planning meetings so that we are not forced into a rush at the end of the next tax year. The general advice I’ve been giving to clients, after listening to them and exploring their capacity for loss, is this: “The only guarantee I can give you is that things will change, nothing will stay the same”.

For more information about investing in ISAs for the new 2012-2013 tax year, read "Your 2012-2013 Guide to ISA Investing".

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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