The Benefits of Wealth Management for Legal Professionals
David Shepherd
1-2-1?? Wealth Management - Building Success with City Professionals and Business Owners. I work to Grow and Protect clients Wealth to achieve Financial Freedom. UK VouchedFor Top Financial Adviser - Business Owner - MD
The general benefits of wealth management are well-documented, but this article considers the specific benefits of wealth management for legal professionals. Focusing on the ever-changing legal industry, challenging cases and career progression while simultaneously managing your finances, assets, and long-term goals is a stretch too far for many.
This brings us to the advantages of wealth management for individuals working in the legal field. There are a number to consider, such as investments, taxes, and protecting assets while also maximising tax relief and retirement income.
Financial security
While the range of income for qualified legal professionals will vary significantly, on the whole, this is viewed as an industry attracting well in advance of the average UK income. However, for many, the industry's unpredictable nature can make it difficult to manage finances in the longer term. This is where the benefits of wealth management come into play:-
A long-term financial plan gives you a goal for the future, something to aim for, although it is vital to have a degree of flexibility. Focusing on a diverse range of assets and investments while managing risk and retaining an element of liquidity is critical. As we have seen in recent years, it's important to take a balanced approach to long-term investment while being able to pivot your investment strategy in changing markets.
Achieving long-term goals
Typically, your investment strategy will vary from the early days, traditionally focused on capital growth, until you are approaching retirement, usually switching towards income and more stable investments. Many in the legal profession will look towards winding down as they approach retirement, eventually finding a work-life balance after years of trying.?
Long-term financial goals are very personal, but there are core targets, which might include:-
The flexible nature of wealth management means that your finances can be managed to give you the best chance of achieving your financial goals. Nothing is set in stone; your situation and personal goals will likely change over the years, but having a target destination is essential. How else would you know when you've achieved your goal?
Tax efficient finances
As a legal professional, you will likely be well versed in the legal system's intricacies, but the UK's tax system is a whole different level of complexity!
Strategic long-term planning is the key to tax efficiency, maximising tax relief while minimising your short, medium and long-term tax liabilities. Even what appears to be relatively minor tweaks in the tax system can significantly impact your net income, with fiscal drag a particularly hot topic of late. This seemingly innocuous freezing of the various tax bands boosts government coffers due to wage inflation.
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As your wealth manager, my role is to monitor regulatory changes and make the appropriate adjustments. Many tax reliefs and allowances are available on a "use it, or lose it" basis and are therefore time-critical.
Retirement planning
Retirement is one of those stages of your life which seems years away, and then suddenly it's here; you're ready, but are your finances?
In a similar situation to tax planning, it is never too soon (or indeed too late) to begin planning for your retirement, taking into account:-
In isolation, some of the tax benefits of pension contributions and investment allowances may seem relatively modest. However, the real benefits begin to emerge once you consider the cumulative impact year-on-year together with potential long-term capital appreciation.
Once you retire, there are yet more issues to consider, such as:-
In recent years, we have seen an extension of the pension freedoms brought in over the last decade. The government recently pledged to reform the lifetime allowance and taxation on relatively large pension funds. We were in the unfortunate situation that many people were forced to stop their pension contributions; indeed, some retired early due to how pension contributions/income were taxed.
Conclusion
We go to mechanics for advice about our cars, a lawyer for legal guidance and a doctor for medical treatment, so it makes sense to appoint a wealth manager for financial advice. The legal profession is intense and focused, with many legal professionals experiencing significant volatility in their income over the years.?
For many people, there are not enough hours in the day to focus on their day job and their finances. Monitoring short-term movements and regulation changes while maintaining one eye on the longer-term, retirement and tax planning, is challenging. Working with your wealth management adviser, you can concentrate on your career, maximising your income, confident in the knowledge there is a long-term financial plan in place.?
If you would like to discuss the value of wealth management, please get in touch with me, and we can discuss the options.