1. FP BulletinAn update from UBS Financial Planning
December 2015, Issue 5
Dear readers,
Welcome to the last edition of our FP Bulletin for this year; an update brought
to you by our team of Financial Planners.
Our FP Bulletins provide you with an overview of what is happening in the world
of Financial Planning and will help you plan ahead accordingly.
This edition provides insight into life stage planning and understanding what
wealth means to you.
We hope you enjoy it.
UBS Financial Planning
Wealth Management UK
A time to reflect
An introduction to life stage planning
For UBS marketing purposes
Know your meaning of wealth
01
Values, needs, and aspirations
Life's stages
02
05
Roller-coaster of emotions
How does this fit together?
03
06
Life's capital: our different
sources of wealth
How we can help
04
07
2. 2
01. Know your
meaning of wealth
Wealth generation signifies something
of meaningful worth being created.
But what is that ‘something‘ and
why does it mean different things to
different people? For example, does
it signify a responsibility to society or
does it fulfil a need to further expand
your businesses?
It’s key to understand your values and
needs before trying to make sense of
these questions, and to managing
your wealth and planning for the
future.
02. Values, needs
and aspirations
Children are often asked what they
want to be when they grow up and
are encouraged to dream big.
Schools generally guide children to
make sensible and practical subject
choices but this can result in their
dreams becoming lost in the pursuit
of academic learning. Where do
those big dreams fit in our adult
lives? Are our needs aligned with
our values? These are questions we
should continue to ask ourselves
throughout our lives as events and
opportunities arise.
For some, this is a season to reflect – a time to
assess whether the choices you've made met your
goals, and to plan for the year ahead. Here, UBS's
Financial Planners guide you through the maze
that is life stage planning.
How do you best align your aspirations with your wealth? Who should
you trust to help you with the key decisions about your future?
“A dream is the
visualization of your goal
and the motivation for
your soul.”
Kristoffer Howes (brand
strategist)
03. Roller-coaster of
emotions
The creation, management and
distribution of wealth involves
responsibility and brings a host of
emotions – from feelings of identity,
independence and pride, to doubt and
anxiety.
At whatever stage of life you're in, the
interconnection of your values, beliefs
and experiences is key to helping you
understand these emotions.
3. 3
04. Life’s capital: our different sources of
wealth
We identify three different types of capital – human, financial and social.
Human capital and social capital do not exist independently: our social capital
feeds the development of our human capital and vice versa.
Building these types of capital is compatible with the core ethos of long term planning: accumulating for long term, rather
than short term gain.
Human capital Financial capital Social capital
This is the value of future
earning potential derived
from an accumulation of
knowledge, skills and career
decisions.
Human capital provides the
potential to create wealth and
generate future savings and
retirement income.
It creates close links to
societal contributions.
This is the value generated
from human capital, for ex-
ample, cash or investments.
Financial capital becomes
available for savings as well
as present and future con-
sumption.
Savings are invested to gen-
erate an income for funding
retirement.
This represents:
– Your core values and
principles
– Engagement in your
community
– Contributions to wider
society
– Your personal legacy
Social capital is often
expressed through strategic
philanthropy or impact
investing
4. 4
For illustrative purposes only
Source: UBS
05. Life’s stages
Business owners face frequent
decisions in their enterprise.
Making the transition out of a
business is one of the two most
emotive decisions to take (the other
being how to make a transition within
the business). The impact of such
decisions on your goals, aspirations
and financial plan should not be
underestimated. To help you decide
the strategy for managing not just
your wealth, but the goals in your life,
it can be helpful to ask yourself why
you are taking these decisions and
what they mean to you.
The chart below helps to visualise
the particular journey that many
successful entrepreneur business
owners encounter – when to sell the
business, when and how to move up
the property ladder, and what the
future will look like. At the same time,
it demonstrates that, whilst each of
us embarks on an individual journey,
many events and life stages are
encountered by all of us.
These stages may bring about planned
and unplanned transitions or events in
family and business life. Importantly, it
also shows the interaction of the three
different types of capital mentioned
earlier. The effect of capital, life
events, and the way that wealth is
acquired, may be profound.
Each life stage brings its own risks.
As discussed in an earlier bulletin, you
should be more aware of longevity
and health risk as you get older, but
these issues need to be considered
earlier, such as when you are
approaching retirement. In retirement,
for example, you can face very specific
risks around the timing of income
withdrawals. Legislative changes
for pension savings create their own
risks for pension savers and are very
difficult to anticipate.
5. 5
06. How does this
fit together?
As outlined, all of life's stages are
interdependent. As you plot your
goals – and even those planned and
unplanned events such as a business
sale or family illness - along each life
stage, financial planners can assist in
planning for those events and
consider their potential impact, help
you reconsider your goals and then
help you structure your assets with
sufficient flexibility and contingency to
meet those goals.
By collaboratively building your
financial plan around your aspirations
and making it immediately identifiable
with your core values and principles,
we can help you manage your
financial wealth in an engaging and
harmonious way.
07. How we can
help
UBS's Financial Planning service
can help you to get a deeper
understanding of what is involved
in long term planning and the
factors you need to consider for your
individual circumstances.
