A Change of Pace – How Investment Priorities Change in Later Life For High-Net-Worths

Landmark birthdays are perhaps not what they used to be. Thanks to a general improvement in health and longevity across the industrialised world, many of us have consciously or otherwise, pushed back the age at which we intend to start winding down, (or further down the line, retire) to some indeterminate time in the future.  

But even if it is a life goal to retire at, say, 50, few successful people are content simply to wind down. Retirement might mean selling a business or cashing in a pension while going on to invest as an angel, mentor young business owners, or sit on a number of boards in a non-executive capacity. Equally, 50 might be the age at which to start a new career or indeed take another step up to the very top of the corporate ladder.  

But it would be wrong to suggest that 50 is the new 30, or indeed that 60 is the new 40. When it comes to looking at investment and wealth management strategies, priorities tend to change as time marches on.

Often they change for very positive reasons. Early working life can be a struggle. Sitting alongside the pressures associated with kick-starting a successful career or getting a new business off the ground, there are parallel challenges of getting on the property ladder while also investing for the future. In middle life, there are often further pressures around raising a family while also taking a career to the next level.  

Further down the road, life gets easier. The children have grown up and made the journey through school and university and are now earning incomes of their own. A career has been built and there is a continuing stream of regular income from salary, dividends or a pension. There is also income from investment and – importantly – money to invest.  

New Questions

Less pressure, then – but also a new set of choices and questions.

Certainly, the prospect of retirement is likely to loom large on the near or distant horizon. Many – probably a very significant majority of – High Net Worth individuals will be seeing retirement through the prism of a number of investments, rather than simply a pension. The question – not always a simple one to answer – is whether those investments will deliver the expected retirement income.

Then there is the question of passing wealth on to the next generation in the most tax efficient methods possible. It is, for example, important to make plans to keep inheritance tax to a minimum, while also staying compliant with the letter and the spirit of HMRC rules. In parallel, there are various strategies that can be used to pass on wealth progressively – including gifting and setting up trusts. Again this needs careful planning.

For those who are still working – and relying on that work for a significant percentage of their income – financial planning should include strategies to protect against unforeseen events, such as illness. There are various ways to do this, ranging from insurance/assurance, through to income-generating investments, such as buy to let properties.

A Lot to Think About

So there is a lot to think about. Perhaps too much, given that issues such as retirement planning, protection and inheritance tax planning begin to become relevant long before most High Net Worth Individuals finally opt to retire. And when life is still busy, it can be difficult to ensure that all the pieces of the jigsaw have been effectively slotted into place.

One way to address the issue is to bring as much of the financial planning and investment strategy process together by using a wealth management company that provides holistic advice and help build a comprehensive strategy.

What does that mean in practice? Well, in the case of The Route – City wealth club, the aim is to provide its Members with a 360-degree wealth management service that focuses on life goal planning, taking into consideration tax planning, estate planning and advice on retirement structures while also giving access to a broad range of investment opportunities, including bespoke fund management.

Members of The Route also have access to opportunities for secured lending to SMEs via The Route’s innovative Private Debt Platform. Over the last five years, the platform has generated an average return of 18% to Members with no capital losses recorded to date.

The requirements of Route Members – regardless of age – are regularly reviewed. Rather than seeing investment strategy entirely through the traditional starting point of assessing appetite for risk, The Route’s team takes a goal-based approach, which could be characterised in terms of “what do you want to achieve and how do you get there?” It’s an approach that ensures that regardless of age, circumstance or objectives, the advice and opportunities on offer are absolutely relevant.

To find out more:  020 3141 9040