Whose money is it anyway?

I’m somewhat surprised when talking with some clients that they seem to be seeking my approval before spending their own money.

I can certainly think of some clients whose previous experience with an adviser has been that they have almost been denied access to their money.

Yes, it is important to have an emergency fund so that in the event of an unexpected bill arriving you have the wherewithal to pay for it.

Certainly having enough income for later life is important, particularly so given that many underestimate possible life expectancy.

Yes being able to deal with unexpected and uncertain costs in the future, such as care costs, is important.

But equally as important is having the confidence to spend some money now to enjoy the experiences that you want to have.

We were debating this subject in the last few days with another industry professional and talking about how some advisers seem to act as if the money belongs to them. It doesn’t.

It doesn’t belong to the financial adviser, the product or platform provider or the investment company to whom the investment has been delegated.

It belongs to you the client, it’s your money.

Don’t get me wrong I am not advocating blowing your pension fund on the “Lamborghini” as a well-known ex-pensions Minister once suggested might happen.

But I am talking about striking the right balance between saving and investing for the future and enjoying life now.

There is little doubt that regrets in later life tend to focus on the experiences that were missed when the individual had the energy to enjoy those experiences. Rarely is the later life regret about missing out on stuff (the new car or the new wide-screen TV).

And who wouldn’t dip into their savings and spend it to support early retirement and escape from the drudgery of an unloved job?

Unsurprisingly this is where good financial planning kicks in.

Being able to spend with confidence is, in my view, as important as recognising the need to save for the future.