AIDAN BAILEY shows you the right path for making sound financial planning decisions.

During these uncertain financial times your planning can be tested to the limits and it can be tempting to jump from one "good idea" to another. But without careful planning, such "day" trading can be a recipe for disaster. Here are some key steps to consider in helping you stay on the straight and narrow.
Information Before you make plans for your financial future, ensure you understand where you’re starting from – check your income, assets, retirement objectives, life assurance and pension plans, UK or otherwise. It’s difficult to map a plan without knowing where you’re starting from.
Time horizons Give each of your assets a time period to achieve set objectives and consider specific future dates to assess and make further plans.
Risk tolerance When you’re planning a financial strategy, always carefully consider the degree of risk you’re willing to take. This doesn’t mean because you have a high capacity to accept risk you should adopt a high risk portfolio. Understand your limits.
Asset allocation Work together with a licensed and qualified adviser to determine a mix of assets to best suit your needs. Studies have shown the decision of asset allocation is the most important when it comes to determining investment returns.
Fund selection Once you’ve chosen your asset allocation, you’ll require a blend of suitable funds to meet your needs. Again, it’s best to seek advice from a licensed and qualified adviser at this stage.
Tax planning Although the tax "tail" should not wag the investment "dog", it’s important to protect your assets from unnecessary tax. Identify the most tax-efficient manner for your investments – such as approved pension, ISA, bonds, trusts and other structures. 
Review your financial affairs on a regular basis to ensure your chosen asset allocation continues to be suitable, funds are performing in line with expectations and advantages are made of any changes to tax legislation. Changes can then be made if necessary, although you shouldn’t lose heart if your strategy is not immediately successful. Markets rarely move in straight lines and by selling out of a fund which has dropped in value over the short term, you could miss out on a recovery. If your asset allocation fits your circumstances, objectives and risk profile, always sit tight on it – unless something fundamental, such as your objectives, has changed.
 

Aidan BaileyBA (Hons) CertPFS AWP^CM 
General Manager Singapore, International Division