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The Importance of Financial Advice
Sole Trader
Having chosen to run a business as a sole trader, aside from striking to be successful, there are endless different matters that will be encountered and make demands on time. Amongst these are the many financial planning issues, both on a personal level and as an employer you need to take the time to plan.
Nearly always, those individuals that run successful businesses find that time is precious and time can be very limited. When striving to be effective and profitable, setting time aside to broach financial planning issues is often put lower down the list of daily priorities.
Understand the cost of poor planning; benefits of good planning, failing to set aside the time or financial resource is often a false economy. We regularly encounter clients that continue to pay premiums to unnecessary or uncompetitive insurances or invest into products that deliver subpar performance.
However, those same clients would be reluctant to allow a poorly performing employee or inefficiencies in their business model to reduce productivity or have a negative impact on profit. Whilst proprietors are very focused on the day to day activities of their business, the need to address financial planning should be considered an equally important part of their business plan.
Contact Gow's for a full review of your business needs
Debt protection
This is often effected upon the instruction of the bank with a view to covering overdrafts and commercial loans.
Key person cover
Key person insurance is effected where the long-term absence through accident or ill health, or death of an individual, will have a severe detrimental effect on the profits of the business. It is effected to cover the cost of replacing the intellectual or physical skills that contribute to the success of the business and the financial impact the loss of such skills would create. Clearly such cover may be considered for sole traders, as they are the founders of a business and are often in essence ‘what make the business tick’.
As the situation arises, key employees should be protected, to provide the business ‘breathing
space’ and the ability to endure the downturn in profits that could ensue. This allows time to seek
out the right replacement and to cover recruitment costs, which alone can be quite high.
Group risk
a key constituent to the growth or prosperity of a business is the employees. In order to attract and retain good staff, provisions such as sick pay entitlement, death in service (life cover), private medical insurance (PMI) and critical illness are appropriate as part of a voluntary or standard employee benefit package. These can of course be self-insured, although this may not be desirable as this can leave the employer exposed to a substantial liability. Therefore, it maybe preferable to insure and provide the benefits by way of group risk arrangements.
Stakeholder Pension
A straightforward personal pension plan is a “stakeholder” personal pension plan which is a type of low-charge pension in which you can save from as little as £20.
Or you could choose a personal pension which often offers a wider investment choice than what’s available with a “stakeholder” personal pension. But do be aware that personal pension plans often have higher minimum contributions and the charges could be higher too.
Self-Invested Personal Pension (SIPP)
SIPPs give savers the opportunity of incorporating funds managed by different investment managers within one pension portfolio. This diversity is particularly attractive if you have a large fund and are considering using Pension Fund Withdrawal (PFW) products after retirement. With a SIPP, investments can essentially be segmented, using part for PFW with the balance being moved around at will.
A SIPP is a particularly useful vehicle if an individual or business wants to buy commercial property from which to carry out its business. Commercial property can be leased to a business. The rent paid to the fund is tax deductible and the fund receives the rent gross. Borrowing is also possible and banks will typically lend up to 70% of loan to value.
Business Planning
Personal Planning
Life Assurance
Income Protection
Investments
Mortgage
Retirement Planning