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The demands of life as a self-employed barrister can mean that often your personal finances take a back seat. But in light of our recently acquired financial freedom, it is our responsibility to ensure we are representing our financial interests as effectively as possible.
No matter what your age, or stage in your career at the Bar, there are a number of areas of financial planning to consider; to provide you with peace of mind and ensure you are putting in place the financial foundations necessary to reach your financial goals, and not leave anything to chance.
Financial Planning: The Essentials
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It’s role in your financial plan
The foundations – protecting everything you have achieved so far and your future goals and objectives.
Without appropriate protection in place:
Whilst there are many financial protection products available, that might be suitable for your circumstances, Income Protection Insurance is essential for barristers at the self-employed bar.
What does it cover?
Next Steps:
Everyone’s circumstances are unique, but in all cases, speaking to a financial adviser:
· To establish the suitability of financial protection you may already have in place
· Identify any gaps that should be covered
· Put in place appropriate solutions to secure your financial position
They will ensure you are prepared for any unexpected risks you might face and safeguard the efforts you have made towards building both your current and future lifestyle.
The value of an investment with St James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
Trusts are not regulated by the Financial Conduct Authority.
REFERENCES
(1) Aegon UK, Our insight to the nation’s financial wellbeing, 2022.
It’s role in your financial plan
Creating the retirement lifestyle you want.
Whilst the above figures can in part be explained by issues facing women, such as the gender pay gap and maternity breaks, in light of the great steps we are taking in today’s society towards gender equality, it is time that women take control of their future and work to improve this disparity whilst also providing themselves with financial freedom at retirement.
How much do I need?
What you can do:
Speaking to a financial adviser they can help you to:
The benefits of starting to save now:
It’s role in your financial plan
Establishing a method for managing your income is essential for ensuring that whilst you can meet your short-term commitments, any surplus income is working hard for you in the background.
There is a time and a place for both cash and investment strategies – are you utilising them effectively?
What you can do:
As with all areas of financial planning, everyone’s circumstances are unique, but in all cases, speaking to a financial adviser can help to:
The below table provides you with an example model for managing your income, ensuring that all needs and areas are addressed:
REFERENCES
(1) Nutmeg, Why Women are Better Investors, 2022.
Its role in your financial plan:
Regularly reviewing the plans you have in place, ensures they continue to remain suitable to your individual circumstances and on track to meeting your goals.
No matter what financial strategy you put in place at the start of your journey, it is likely that as you move through your personal and professional life, your needs, objectives and circumstances will change, and with that, your financial plans need to adapt.
What you can do:
The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief generally depends on individual circumstances.
Working with a financial adviser is as essential as appointing an accountant.
There are ‘do it yourself’ options available, but determining the most suitable product and financially secure firm, for potential growth, in alignment to your risk appetite is not easy; can be difficult to devote the necessary time to, and may not be something you want to take responsibility for, without the requisite expertise.
We work to a three-stage process to provide a bespoke service:
As with all financial adviser firms, there is no obligation to choose to work with us as your financial adviser following any initial discussions or questions you may wish to ask.
If you decide you would like to work with us specifically, charges will be explained in full – Westgate discounts our standard charges for members of the Bar.
You should always bear in mind that choosing the right financial adviser to work with is not just about the cost, make sure you also factor in the following considerations:
• Net return
• Level of risk
• Quality of Fund Managers
• Financial security of the company
• Service provided
Westgate specialises in advising members of the Bar, and with this knowledge and expertise of the sector alongside an understanding of the demands and complexities of a career at the Bar, provides a tailored and flexible service to meet your needs, goals and objectives.
We are a Partner Practice of FTSE 100 company, St. James’s Place, our advice is backed by the St. James’s Place Advice Guarantee* and St. James’s Place are part of the Financial Services Compensation Scheme, providing clients with confidence in the placement of their funds with us.
Our comprehensive and holistic advice addresses all of these needs, through one point of contact.
Your home may be repossessed if you do not keep up repayments on your mortgage. The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up.
You may get back less than you invested. Trusts are not regulated by the Financial Conduct Authority.
Tel: 01962 353153
Web: https://westgatewealth.co.uk/specialist-advice/the-legal-profession/the-bar
Email: louise.crush@sjpp.co.uk
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*St. James’s Place guarantees the suitability of the advice being given by members of the St. James’s Place Partnership when recommending any of the wealth management products and services available from companies in the Group, more details of which are set out on the Group’s website at www.sjp.co.uk/products.
Westgate Wealth Management Limited is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management products and services, more details of which are set out on the Group’s website www.sjp.co.uk/products. The titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives.
Financial remuneration is one of the biggest rewards and biggest perils of being a self-employed barrister. Issues with cashflow are not unique to women barristers, but when we couple these issues with the gender, pension and investment gaps, women barristers need to take extra care when it comes to accounting and managing of wealth.
Her Bar introduces their financial expert partner, Westgate Wealth Management, who are able to provide key tips and guidance for women barristers, when it comes to managing their wealth... Westgate Wealth Management, provides a friendly, female-led holistic advice and financial planning service for members of the Bar, backed by the strength and security of FTSE 100 company, St. James’s Place Wealth Management, and we are here for you - let’s talk!
Westgate Wealth Management Limited is an Appointed Representative of and represents only St. James's Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management products and services, more details of which are set out on the Group’s website www.sjp.co.uk/products. The titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James's Place representatives.
When you are time poor and focusing your energy on developing a successful career at the Bar, I understand that your personal finances can often take a back seat. However, having a financial adviser to support you throughout your journey, ensuring your financial needs and objectives are identified and looked after, allows you to focus on a career that provides you not only with job satisfaction, but also the opportunity to realise your personal goals and aspirations.
Whether you are just beginning pupillage or have an established practice at the Bar, there are some key financial planning principles that can help to ensure you are putting in place the financial foundations necessary to secure and enhance your financial future.
Act today, don’t leave your financial future to chance and ask yourself the following questions on the page...
Despite women’s value and input in a household, beyond their earnings, women typically underestimate their significance and tend to insure themselves for much less than their male counterparts – as much as 53% less in the case of Life Insurance and 90% less when it comes to Critical Illness Cover.[1]
If you’re self-employed, as is the case for many barristers, it is even more important you take action to protect your interests.
X No employment benefits/support in the form of sick pay or death in service etc.
X No Statutory sick pay
Although it is not pleasant to consider the value of your life, or your chances of becoming critically ill, putting in place appropriate protection against all aspects of risk, can help mitigate against the unexpected, tackling whatever life throws at you, ensuring what you have worked hard to build remains secure and gives you peace of mind.
There is a 36% chance of a woman being unable to work for two months or more and an 12% chance of becoming critically ill.[2]
On average, women are retiring with significantly lower pension wealth than men. Whilst this can be attributed to factors including the gender pay gap and taking career breaks – with a 2-year maternity break potentially reducing your pension pot by £25,500[3] we need not despair!
Forewarned is Forearmed
Whilst the earlier you start saving for retirement the easier it will be to create the retirement lifestyle you want, no matter what stage of your career, it is never too late to do something. Assessing your current position, looking ahead and putting a plan in place to optimise any savings will benefit your future self.
Alongside the obvious benefits of building savings to give you the freedom to achieve your retirement goals, pensions also have several tax efficient advantages, which for higher income taxpayers and individuals with large estates to leave beneficiaries can prove invaluable in effectively managing your finances.
For a comfortable retirement lifestyle, with an annual income of £33,000, the size of pension pot for this standard of retirement is £599,667[4]
No matter what financial strategy you start with, it is likely that as you move through your personal and professional life, your needs, objectives and circumstances will change.
It is vital that the plans you have in place are regularly reviewed to ensure they continue to remain relevant to your individual circumstances and on track to meet your goals.
Review, review, review.
The value of of an investment with St James' Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
Equities do not provide the security of capital which is characteristic of a deposit with a bank or building society.
The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief is generally dependent on individual circumstances.
Research undertaken by the WealthiHer Network[5], found that men are approximately twice as likely as women to experience high self-esteem, and in those cases where women had high self-esteem, they had also earned wealth during their career, with 46% also commenting that having financial independence was a key factor.
Short and Medium-term funds
No matter what financial strategy you choose to implement or what stage of your career at the Bar, it is essential to have a safety net in place to cover short-term outgoings and have the flexibility to tackle unforeseen circumstances and uncertain times.
Equally, your planned expenditure for the next 1-5 years, whether this be to purchase a new car, a house or holidays etc, has to remain accessible.
Whilst the funds for the above cannot help you grow your wealth, it is an important element of financial planning and equally important it is allocated to the correct saving plan, to ensure it doesn’t also impede your financial security, by taking inappropriate investment risks.
Retain an emergency fund of 3-6 months’ expenditure in an easily accessible account.
Long-Term
We consider your long-term savings those which you are hoping not to spend over the next 5+ years and it is this money that has the potential to enhance your financial position, working hard for you in the background, to provide you with greater opportunity to achieve your long-term goals, whilst you focus your energy on your practice.
As the above highlights, it is important to hold a proportion of cash for specific goals and objectives. However, holding substantial funds in cash, whilst not subject to investment risk, are subject to inflation risk and the potential that the value of this cash can be eroded over time. Investing a proportion of your savings provides you with the opportunity to grow your wealth, taking advantage of tax efficient allowances and types of investment available to you.
Volatility is characteristic of investing, but history shows us time is on our side
If you’re new to investing, remember not to feel overwhelmed, you don’t need to know everything, instead, find a trusted financial adviser, with a strong investment management proposition, who can work with you to build your understanding, confidence and experience in the investment world.
Whilst it was only following the implementation of the UK’s Sex Discrimination Act, in 1975, that women were permitted to open bank accounts in their own right, today, we have full financial freedom and currently, women account for control of approximately a third of global wealth[6]– we have the power and opportunity to reach our goals.
REFERENCES
[1] Women and Protection during Coronavirus, Zurich, 22 June 2020.
[2]Figures from LV= Risk Reality Calculator, based on a 40-year-old, non-smoking woman retiring at age 67
[3] A J Bell, 25 February 2019
[4] Retirement Living Standards, Pensions and Lifetime Savings Association, published 2021. Figure is for a standard single person net income. Calculated on an annuity of £4,800 per £100,000 and include an assumed State Pension of £9339 per annum (2021-22). The income figures do not take into account any housing costs. i.e. Mortgage payments or rent. The pension pot assumes any tax-free cash has already been taken.
[5] WealthiHer Network, The Changing Faces of Women’s Wealth, 2021, total number surveyed 22392
[6] Women in Wealth: Managing the Next Decade of Women’s Wealth, Boston Consulting Group 2020 (April 2020)
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