IFA to form a plan of action.

[trowelhead]

Afternoon all,

After much deliberation i’ve realised that an IFA would be very useful

However, i only want to pay for advice sessions rather than a % of assets under management etc

Basically to work out a plan/framework that I can action then periodic reviews. Perhaps some ongoing email/WhatsApp advice.

With some ifas I get the impression they are biased towards pointing clients at shares and pensions so they get their % cut. Paying for advice only seems to align them closer to a whole picture approach?

Does such a thing exist?

Basic situation is - decent earnings running ltd company. Separate property company I use for investments. So working out tax stuff, dividend stuff. Working out if better to invest in a company rather than take 32.5% hit etc etc.

[FredClogs]

Sounds like an accountant or tax advisor would be better for you if it's a question of tax or Ltd company set up advice.

[JulianPH]

Good luck!!!

I agree with Fred, this is accountant territory.

You could call Intelligent Money (thread above) for free information and guidance (disclosure: I am connected, but am only offering some free professional input from one of our account managers in order to help put you in the right direction) but I suspect the result will be the same - this is for an accountant.

[trowelhead]

JulianPH said:

Good luck!!!

I agree with Fred, this is accountant territory.

You could call Intelligent Money (thread above) for free information and guidance (disclosure: I am connected, but am only offering some free professional input from one of our account managers in order to help put you in the right direction) but I suspect the result will be the same - this is for an accountant.

Thanks Julian

I literally just found that thread straight after posting this - i’m reading through it now!

Ok that makes sense. Perhaps I need a new accountant, my current ones seem more reactive than proactive

Every month I have a surplus of cash in my ltd company

My main conundrum is on where to direct it.

So it crosses over accountancy and investment advice in a way

For example open a share dealing account in my company name. Pay 19% corp tax then invest. Or take a further 32.5% hit and invest in an ISA

Or carry on loaning funds to property company where i’m getting leveraged returns around 15% but with more hassle and risk...

Also do i PCP a car vs paying all cash (after paying 32.5% dividend hit)
Also do i rent my own house and carry on buying rental properties (the house i live in yields 4% for the landlord gross, perhaps 3% net. My rental properties gross more like 7/8% yields)

So lots of these matters are really hard to find the right advice, as there are multiple moving parts!

If this is more an accountancy matter, does anyone have any good contacts?

[JulianPH]

I'll get back to you tomorrow (wife calling me to come up!!!).

It all sounds sensible and you probably just need a sounding board and a bit (or a lot) more pro-activity from your accountant.

Cheers

Julian

[Derek Chevalier]

trowelhead said:

After much deliberation i’ve realised that an IFA would be very useful

Great

trowelhead said:

However, i only want to pay for advice sessions rather than a % of assets under management etc

I think you need to focus on whether you feel an IFA can add value before focusing on the method of payment

trowelhead said:

Basically to work out a plan/framework that I can action then periodic reviews. Perhaps some ongoing email/WhatsApp advice.

What do you think the ongoing advice might be that isn't covered in the annual reviews?

trowelhead said:

With some ifas I get the impression they are biased towards pointing clients at shares and pensions so they get their % cut. Paying for advice only seems to align them closer to a whole picture approach?

I know some great financial planners that have chosen to charge (after much deliberation) % of AUM fees. Others charge flat fees. Others charge a mixture.

trowelhead said:

Basic situation is - decent earnings running ltd company. Separate property company I use for investments. So working out tax stuff, dividend stuff. Working out if better to invest in a company rather than take 32.5% hit etc etc.

A decent financial planner will help you determine what your real objectives are (e.g what's the earliest I can jack it all in and drive round Europe without fear of running out of money) before they even begin to look at the best way to achieve it.

Edited by Derek Chevalier on Friday 25th January 13:08

[JulianPH]

Hi mate

I assume your company is maxing out pension contributions to save on income tax, NI and corporation tax?

Derek is an excellent financial adviser BTW, if you are looking for one.

[trowelhead]

Derek Chevalier said:

trowelhead said:

After much deliberation i’ve realised that an IFA would be very useful

Great

trowelhead said:

However, i only want to pay for advice sessions rather than a % of assets under management etc

I think you need to focus on whether you feel an IFA can add value before focusing on the method of payment

trowelhead said:

Basically to work out a plan/framework that I can action then periodic reviews. Perhaps some ongoing email/WhatsApp advice.

What do you think the ongoing advice might be that isn't covered in the annual reviews?

trowelhead said:

With some ifas I get the impression they are biased towards pointing clients at shares and pensions so they get their % cut. Paying for advice only seems to align them closer to a whole picture approach?

I know some great financial planners that have chosen to charge (after much deliberation) % of AUM fees. Others charge flat fees. Others charge a mixture.

trowelhead said:

Basic situation is - decent earnings running ltd company. Separate property company I use for investments. So working out tax stuff, dividend stuff. Working out if better to invest in a company rather than take 32.5% hit etc etc.

A decent financial planner will help you determine what your real objectives are (e.g what's the earliest I can jack it all in and drive round Europe without fear of running out of money) before they even begin to look at the best way to achieve it.

Edited by Derek Chevalier on Friday 25th January 13:08

Thank you for the replies!

Yes you’re right about thinking about them adding value rather than worrying about fees!

And yes I suppose there is no real need for ongoing advice - just a plan for the year would suffice

This thread has helped me refine my thinking. I guess I know what to do - it’s more looking for a “coach” / mentor type person to guide me and help stay on track, more with the behavioural and life goals / holistic side of things.

Like for example in fitness - there is a lot of noise and varied advice - but I’ve found that ignoring the noise, finding a good mentor and sticking to what they say 100% has been the most helpful to make progress.

I’m at a point where I feel bogged down by choices and in need of a simple straightforward plan

[trowelhead]

JulianPH said:

I'll get back to you tomorrow (wife calling me to come up!!!).

It all sounds sensible and you probably just need a sounding board and a bit (or a lot) more pro-activity from your accountant.

Cheers

Julian

Yes exactly!!

[trowelhead]

JulianPH said:

Hi mate

I assume your company is maxing out pension contributions to save on income tax, NI and corporation tax?

Derek is an excellent financial adviser BTW, if you are looking for one.

Nope not currently. I think I may be missing a trick there!

[JulianPH]

trowelhead said:

JulianPH said:

Hi mate

I assume your company is maxing out pension contributions to save on income tax, NI and corporation tax?

Derek is an excellent financial adviser BTW, if you are looking for one.

Nope not currently. I think I may be missing a trick there!

You are missing the biggest trick in the book mate!!!

You company can make pension contributions for you (and any other directors - Mrs trowelhead?) out of gross profits (so no tax deduction and reclaim) of £40k a year each (regardless of your net relevant earnings) AND offset these contributions against corporation tax.

It is win, win, win!

Obviously the downside is you have to wait until you are 10 years from retirement age to access the money, but in the meantime you can use these pension funds to purchase your business premises and further direct the rent into your pension and offset this against future corporation tax!

God how sad am I sat here waiting for questions on the IM thread and then getting over excited when one lands here!!!

Stupid thing number 2 today - trowelhead/forkey. I never saw it!!!

[trowelhead]

JulianPH said:

trowelhead said:

JulianPH said:

Hi mate

I assume your company is maxing out pension contributions to save on income tax, NI and corporation tax?

Derek is an excellent financial adviser BTW, if you are looking for one.

Nope not currently. I think I may be missing a trick there!

You are missing the biggest trick in the book mate!!!

You company can make pension contributions for you (and any other directors - Mrs trowelhead?) out of gross profits (so no tax deduction and reclaim) of £40k a year each (regardless of your net relevant earnings) AND offset these contributions against corporation tax.

It is win, win, win!

Obviously the downside is you have to wait until you are 10 years from retirement age to access the money, but in the meantime you can use these pension funds to purchase your business premises and further direct the rent into your pension and offset this against future corporation tax!

God how sad am I sat here waiting for questions on the IM thread and then getting over excited when one lands here!!!

Stupid thing number 2 today - trowelhead/forkey. I never saw it!!!

Hadn't thought about the business premises option!!

Yes i do need to get the pension set up. I think it's the irrational fear of losing access to the funds should i need them for the business...

[anonymous-user]

trowelhead said:

Yes i do need to get the pension set up. I think it's the irrational fear of losing access to the funds should i need them for the business...

Not irrational at all. Makes perfect sense and is one of my biggest concerns. After all, most businesses which fail do so because they run out of cash, rather than because they weren't able to make a profit.

[trowelhead]

EddieSteadyGo said:

trowelhead said:

Yes i do need to get the pension set up. I think it's the irrational fear of losing access to the funds should i need them for the business...

Not irrational at all. Makes perfect sense and is one of my biggest concerns. After all, most businesses which fail do so because they run out of cash, rather than because they weren't able to make a profit.

Absolutely. But there crosses a point where i think i've had decent amount of funds earning nothing for a few years, and cannot forcast a need for the cash.

Perhaps i'll just start with a monthly amount, rather than a chunk so always have some cash on hand