26 Oct 2020  •  Blog, Covid-19, Finance  •  4min read By  • Stephen Barry

Why it’s never too late to start a financial plan

Stephen Barry, Financial Advisor for Wesleyan, shares insights on the common areas that are best to focus on by more experienced dentists in order to improve financial fortunes…

While its always recommended to start a financial plan as soon as you can, the demands of working life in a busy practice can understandably cause this area of your life to fall by the wayside.

The current market climate is unstable due to COVID-19, causing a knock-on effect to savings, mortgage rates and investments. This is where an experienced financial advisor with a strong understanding of the dental industry could put you in good stead.

Giving yourself time to sit down and review what you want to achieve and what you have in place is key to any plan. It may not seem the most exciting task but the reward when you get it right may move you closer towards your aspirations in a timeframe sooner than you thought possible.

Here are a few areas to consider:

Protect yourself against adversity

As a self-employed dentist or a business owner, covering yourself in terms of protecting all of your assets, such as your income, mortgage and pension, is particularly important.

If an illness or another circumstance stops you from practising, you could find yourself unable to save or make repayments which could delay aspirations such as retiring early.

Your circumstances change so much throughout your career that constantly reviewing your assets and protections in line with changes to regulation can be a safety net against failure. COVID-19 has shown us that the unexpected can completely derail our plans, so if you haven’t recently reviewed your plan, now is a great time to do so.

While it’s important to protect yourself with insurance, income protection and savings, it’s equally important to check you aren’t over-insuring, over-protecting and to check your savings levels are appropriate for your personal circumstances. That’s where your financial advisor can help.

Understand the reward versus risk relationship

Take the appropriate level of risk for the objective you have. Investing can seem like a scary prospect for the inexperienced, but with the right level of risk versus reward you could be in a much better position than you would have been having not considered this avenue at all.

Trying to time the market is a common mistake and turns investment into gambling. Whilst investing when the market is low is a good idea, the truth is that often the cost of delay is more damaging. Most important is to consider your timescale for accessing the funds. If this is quite short, it may be best to go with low risk investment – if you have a longer timescale, you may find that a higher risk investment is more suitable.

Your financial advisor can explain and help you to understand these, and other investment principles.

Form a firm exit strategy

Whether you’re thirty or fifty, it’s never too late to think about retirement. We all work hard in our lifetime, so the prospect of planning your retirement should be quite an exciting one.

The NHS retirement plan is a particularly complex area due to the general legislations in place where it’s difficult to understand it’s worth. There can be quite substantial taxes on your pension if certain limits are exceeded, particularly with lifetime and annual allowances.

Discussing this with a financial advisor who has experience in the dental industry will help you navigate this particular issue, ensuring you get the most reliable and considered advice based on experience in your specific career path. Regularly reviewing your plan with an advisor who understands your history throughout your lifetime will help you keep on track and make necessary adjustments.

An exit strategy for your career is daunting and financially challenging. If you’re a business owner, the sale of a dental practice can often take up to two years to complete. Following this, many dentists now are contracted by the new buyer to stay on at the practice for a period of time after the sale. Your strategy here will significantly impact your timeline for exiting the profession and enjoying a well-earned retirement.

If you would like to find out more valuable information about planning your financial future more effectively, visit www.wesleyan.co.uk and Wesleyan’s financial advisors will be happy to support you.



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