Investment advice built around what the money is for

Why people ask for investment advice

Very few people want an adviser to pick shares for them. What they want is to know that their money is arranged sensibly: enough in cash for emergencies and near-term plans, the rest invested in a way that matches how long they have and how much risk they can live with, and as little as possible lost to tax and charges along the way.

That sounds simple and is surprisingly hard to do alone. People hold too much cash for too long, buy what has just gone up, sell when markets fall, and collect accounts and funds over the years that no longer add up to a plan.

Using the allowances you already have

Each adult can put £20,000 a year into ISAs, where growth and income are free of tax, and £9,000 a year into a Junior ISA for each child. Outside ISAs, the first £3,000 of gains each year is exempt and gains above that are taxed at 18% or 24%. The dividend allowance is £500. From 6 April 2027 the rates of tax on savings interest held outside ISAs rise to 24%, 44% and 49%.

With allowances this small, the order in which money is held and sold matters more than it used to. Couples can often halve a tax bill simply by holding assets in the right name. Moving existing investments into ISAs year by year, and using pensions alongside them, can shelter a substantial sum over time.

Deciding what to do with a lump sum

When money arrives all at once, the temptation is either to do nothing or to do everything immediately. An adviser will usually start with the unglamorous questions. Do you have debts worth clearing? Is your emergency fund in place? Are your pension and ISA allowances used? Only then does the question of how to invest the remainder come up, and whether to do it in one go or in stages.