Prest: Financial planning key to investing with real purpose

As Good Money Week begins with a focus this year on encouraging women to invest, Stockport based Prest Chartered Financial Planners are urging values-led investors not to neglect the importance of financial planning.

Mike Walker, financial planner  at Prest 

Mike Walker, financial planner at Stockport-based Prest Financial Planning, said:

“Investing with real purpose isn’t just about purchasing assets that sit well with your personal values. It’s also about doing so in pursuit of a properly thought-out lifelong financial plan for you and your family.

“We have been constructing portfolios that reflect our clients’ principles for many years, and today about ten per cent of the assets we manage for clients are held in ‘ethical’ portfolios. This is an area we take very seriously, and which has been spearheaded by our chief executive, Graham Prest.

“Over the past five years the FTSE All-Share Index and the FTSE4Good UK Index of ‘ethical’ shares have displayed virtually identical performance. We can’t predict the future, and things like spikes in the global oil price will often temporarily boost the performance of shares that may be screened out of ‘sustainable’ funds, but it appears that now you really don’t have to sacrifice long-term performance in order to follow your principles.

“However, it is important that people don’t simply invest their money without knowing why they are doing so and what personal goals they hope to achieve. Just like mainstream investments, sustainable or ‘impact’ investments differ widely in the levels of risk they carry so you need to invest the right amounts in the right kinds of asset for your risk profile.

“Equally, these investments should be held in the most appropriate mix of products – pensions, ISAs etc – for your circumstances. A well-constructed and managed financial plan is the key to the long-term success of any investment strategy.

“It is also about so much more than purchasing stocks and shares in companies of whose activities you approve. A proper financial plan will include, for example, advice on leaving a legacy or regular charitable giving at a level you can afford over the long term.

“By all means invest in assets that contribute to the greater social or environmental good but please don’t forget that, from a personal finance perspective, investment is always a means to an end rather than an end in itself. To discover what that end is, and the best way of getting there, speak to a financial planner.”

Good Money Week (previously National Ethical Investment Week) is now in its eleventh year and runs from 29 September to 3 October 2018. Co-ordinated by the UK Sustainable Investment and Finance Association, it exists to raise awareness of “sustainable, responsible and ethical finance”.

Prest Financial Planning is a family-owned firm of Chartered Financial Planners based in Stockport, Greater Manchester. It was founded in 1961 and, following several years of record growth, now manages assets worth more £350 million on behalf of clients.