Making an investment plan

It’s easier to find the best home for your savings and investments with a plan. With a plan you know how much to save, and can keep track of progress.

Step 1 – Complete a money fact find

Top tip

The three steps to successful investing:

1. Fact find.

2. Make your plan.

3. Take action.

Before you can make a plan, you need to take stock - identify your needs and goals and work out how much you can save.

If you don’t have this information already, we can help you do a ‘quick check’ or a more detailed money fact find.

Step 2 – Make your investment plan

Protect yourself

Avoid unsolicited investment offers.

Before investing check the FCA register and warning list.

If you’re considering an investment offer, seek independent financial advice.

Drawing on the information from your money fact find, your investment plan should set out:

If you’re investing in funds there are two main types of charges, one-off and ongoing fees. There will be several other costs to consider although, you will need to clarify these with individual fund providers. This should however, give you an idea of what to expect.

Alternatively, you can use the Ongoing Charges Figure (OCF) which is made up of the annual management charge (AMC) and a variety of other operating costs. However, these won’t include all charges that cover the cost of running the fund but will provide you with a starting point to compare charges between funds.

Example

Here’s an example of what the first steps in making an investment plan might look like.

It shows the key elements you would want to get into your plan.

Jane is 35 with a three-year-old son.

Lump sum available to invest: £20,000

Monthly amount available to invest: £500

Wants to build up an emergency fund of 3 months essential outgoings

Timeframe (access my money): less than 5 years (short term)

Features I’m looking for: easy access; no risk to capital

Risk appetite: low in this instance but will depend on the investor

Products products to consider: instant access accounts

Start saving for retirement

Timeframe (access my money): > 10 years (long term)

Features I’m looking for: long term growth; tax efficiency, so consider tax treatment of different products

Risk appetite: high in this instance but dependent on the investor

Products to consider: pensions (check my employer pension scheme first); Stocks and shares ISA

Have enough to fund higher education

Timeframe (access my money): > 10 years (long term)

Features I’m looking for: long term growth; available on specific date

Risk appetite: medium in this instance but dependent on the investor

Products to consider: stocks and shares or cash ISA; fixed term deposits; mixed asset or managed funds; fund gilts

Save £15,000 for a deposit to buy a flat

Timeframe (access my money): 5-10 years (med term)

Features I’m looking for: high interest; tax efficient; locked away

Risk appetite: low in this instance but dependent on the investor

Products to consider: Savings Bonds; Cash ISA

Jane still needs to make decisions about how much she is going to save towards each goal, and this will influence her choice of saving and investment products.

She wants to keep costs down but is going to consider getting some independent financial advice about the best way to save a fund to help her son through university or an apprenticeship when he is older.

Your plan

Armed with information like Jane you can start looking for suitable products.

To help with making choices read our guides below: