The transcendental, awe-inspiring one and… the one where the moon goes in front of the sun. Tee hee.
We’re still battling our way through the tax-year-end deluge and working out ways to try and ease it next year (this year was the worst it has been for quite some time). An easy answer is for clients not just to leave everything to the last minute. I read an article (linked below) about ‘tax year start’ planning, which is really interesting and rather than just stating the obvious, gives some practical implications to planning throughout the year.
However, I don’t think anyone enjoys the year-end flurry. Not the advisers. Not their support team. Not the providers. And so I don’t think it happens just for the fun of it. Tax year start planning makes a lot of sense but it ultimately comes down to the clients. Very few have flexi-ISAs, and so will wait until closer to the end of the tax year before making that commitment to their investment. Even if, technically, they can withdraw again in future, there’s a psychological barrier to doing so. We teach people to invest for the long term so they will often wait until the last minute before making that long-term commitment.
Likewise, many company owners have aligned their company year around the tax years, to allow them to maximise pension and other tax planning. And so until they know with confidence their company's financial results, the planning is unlikely to be done any sooner. We see the same with periodic assessments; these are often done 12 months after the plan commencement which can often be around TYE and thus exacerbates the workflows.
What doesn’t help? Crazy last-minute planning, as we highlighted in last week’s Eclipse. This one was particularly intense but it’s not the first time, and it won’t be the last time, that a curve ball is thrown at the financial planning community. It’s the kind of complexity that reminds you (in case you ever needed reminding!) of the value of financial advice. How much of a difference an adviser can make to a client’s life. But the pressure on us all is far from ideal and risks errors creeping in or things being missed entirely where there just hasn’t been the time to do the planning properly.
What can we do about it? Firstly, there is no need to do your periodic reviews in April. So if you are, give it some serious consideration! Drop me or the compliance team a line if you want to chat it through, but it is absolutely something that can be spread throughout quieter periods of the year. Secondly, consider making sure your clients have Flexible ISAs and bring that into your education – that they can make the investment, potentially even leave it in cash, at any time of the year. Knowing that they can withdraw if needed, or you can arrange investment if not. Likewise with company contributions; regular management accounts should enable a decision to be made on these earlier in the year.
2024 has felt to me like the first proper post-Covid year. Like the year that normality has actually started to return; in work, in markets, in the economy. That could partly explain why this tax year end has been particularly brutal. But just in case 2025 has ambitions to be similar, it could be worth thinking through now what can be done to help your clients, and your sanity (!), sail through it.
Couple of other links; one for our events calendar which includes upcoming CPD events (with literally hundreds of people signed up) and Evolution 2024 (with 40% of tickets already gone, before we’ve even announced the agenda! So if you want to join us, get yours soon). I’ve also linked a blog to our training team, including new joiners, so go meet the expanded team! 🥰
This week's interesting fact: there will be a long wait for the next total eclipse in the U.S. The next one will be in 2033 but is expected to only cross parts of Alaska. For a repeat of this week’s eclipse, 2044 is the date pencilled in the diary. Who knows, we might have sorted out our tax year planning by then!
Have a wonderful weekend all,