Sign up envelope

Sign up

X

Sign up for news alerts.

We update our financial wellbeing resources regularly to help people build their financial literacy. If you would like to be notified of these updates please submit your email address below, you can opt out whenever it suits you.

Square icon-style image overlaid on the hero banner

Year of the Rabbit: Building financial longevity & resilience

As someone who grew up in a Chinese family in the UK, Chinese New Year is always an exciting time of the year. It is also a time for families to reflect on the year and that the new year will bring new hope and prosperity. 2023 is the year of the Rabbit and if planning your finances were a Chinese Zodiac, it would totally be a rabbit as it symbolises longevity, positivity, cautiousness, cleverness and protecting yourself.

Saving for children

The Year of The Rabbit 兔

We spoke to Unividual’s Andy Lei…

“As someone who grew up in a Chinese family in the UK, Chinese New Year is always an exciting time of the year. Whether it is the smell of mum’s cooking, the assortment of different Chinese sweets or the excitement of seeing your friends. It is also a time for families to reflect on the year and that the new year will bring new hope and prosperity. 2023 is the year of the Rabbit 兔 and if planning your finances were a Chinese Zodiac, it would totally be a rabbit as it symbolises longevity, positivity, cautiousness, cleverness and protecting yourself to just name a few.

One of the main traditions during Chinese New Year is for the children to receive “red pockets”, which is filled with money and a sign of good luck. I still remember vividly when I was a child and had to hand my “red pockets” to my parents so it can be used to pay the bills or to “recycle” and give it to their friend’s children- almost as an “exchange”. However, it is a different time now. Could we do things differently to build up financial resilience? A common misconception is that you will need a large sum of money to seek financial advice and to build financial resilience. However, you can help build up you or your child’s portfolios as early as you want.”

Why should I start investing early?

A financial adviser will tell you that an investment might start off small but as it earns interest, the investment and the added interest, earns more interest. Starting at a young age allows for the investment to grow longer. This concept is known as compound interest, or as I like to call it the “snowball effect”.

Let’s look at a practical example. If we start putting away £100 a month with a standard annual growth of 5%. This “red pocket” alone would be worth £35,446.80 after 18 years. This can help with university fees, buying their first home or something to help your children jumpstart their career.

Why don't people use financial advisers?

Trying to organise your finances can be an emotionally challenging task and there may be a lot of barriers that you will face before deciding to seek financial advice. One of the biggest barriers for people to seek financial advice is because they couldn’t find a financial planner they could relate to or would understand the dynamics of their culture. Andy talks about his experiences when his family came to the UK in the 90s “One of the biggest obstacles for us was finding someone like us. Especially for my parents who cannot speak English fluently. It ultimately led to a lot of financial hardship which could have been avoided.”

A growing need for diverse & inclusive financial advice

Recent years have highlighted the growing need for more diversity and inclusion to be demonstrated in financial advice. In this episode on Beyond the Balance Sheet the podcast features Unividual’s Andy Lei and focuses on diversity across the spectrum, including racial, gender and sexual orientation and how having a diverse workforce benefits businesses and clients.

Andy continues: “Let’s face it, even today, there is a real lack of diversity when it comes to the financial services industry. Even googling “Chinese Financial Planner” does not provide any reassurance as everything on the first few pages are for expats in China to receive financial advice and not in the United Kingdom. Although there are improvements in the industry, people still feel underrepresented – as fewer than 1 in 10 management roles in financial services are held by black, Asian or other ethnic minority people*. At Unividual, we proud to be a business that is women and LGBTQIA led and has over 50% of staff who don’t fit the white, male stereotype of a financial adviser.”

*Financial Conduct Authority “Diversity and inclusion in the financial sector – working together to drive change” July 2021

Why should I seek financial advice if I can do it myself?

A big question you might be thinking now is why do I need a financial planner if I can do it myself? We all love to feel empowered and at the end of the day who would know what we need more than ourselves. Well, the areas which a financial planner explores are symbolised in the Chinese rabbit:

1.  Longevity & Independence

This is all about protecting your future self, thinking about how much you need to invest now to achieve what you want to achieve in the future and/or for retirement. These are some thoughts that can put us off from dealing with our finances as it seems so far away and complex. However, it CAN be an enjoyable conversation. Whether this is looking at the different arrangements you have available, if your financial plan is appropriate for your needs or providing a snapshot of what your investments and pensions can potentially look like in the future. Ofcourse there is the importance of investment sustainability, your attitude to risk and your considerations for investing ethically or not.

2. Positivity & Wellbeing

Financial advice is not about one person dictating the conversation. At the end of the day, YOU need to feel safe and comfortable. It does not matter how much money you have in your pocket, if you do not feel safe or you are not doing the right things for you and/or your family, you will feel stressed around money matters. These stresses we can subconsciously and unintentionally pass down to our children and grandchildren too. A chartered financial planner will provide you with tools and knowledge so that you feel empowered and part of the conversation.

3. Cautiousness

At Unividual we have the breadth of experience and knowledge to help people with every area of their business and personal finances. This includes advisers who have advanced retirement and pension planning qualifications for technical areas of advice like defined benefit transfers. So,  whether this is insurance, protection and life cover, pensions, savings or investments you can have just one person making sure all of the areas are signing inline with the same hymn sheet.

Why not check out our Ultimate Guide To Financial Planning

4. Cleverness

At Unividual we are proud to say that we like to geek things up! Whether this is making sure that you are utilising all your tax allowances or computing formulas and providing options to make sure that you are in the best position that you can be financially. When it comes to educating and communicating to clients though we do not use jargon or technical language. Our goal with every client is to ensure they understand all their options and have the power to choose what they want to do with their financial plan with our guidance and support along the way. To achieve this you will have lots of questions you feel are silly or irrelevant and you will be encouraged to ask them so we can discuss everything out loud. This again reduces anxiety around your financial plan.

5. Protection

We are all guilty when it comes to protection and covering ourselves from risks, whether this is making sure that you have enough rainy day money or having the appropriate life assurance policies in place. A financial planner will guide you through a simple process of looking at what risks you have around you that could impact on your financial plan.  Although it might not be considered as the most exciting part of your finances, to us it is the most important. Whether this is protecting your mortgage liability, family income or inheritance tax. People and businesses who do not have this in place work hard to build up savings to find one day that pot depleted in an emergency. This not only puts your future at risk but that of your children, grandchildren or loved ones (we don’t all have children!) whoever is set to inherit your estate. Insurance aims to protect your savings and keeps your plan on track at times when you may not have an income.

There is no get rich quick

Legend has it the Rabbit was proud of its speed. He was neighbours with the Ox and always made fun of how slow the Ox was. One day, the Jade Emperor said the zodiac order would be decided by the order in which the animals arrived at his party. Rabbit set off at daybreak. But when he got there, no other animals were in sight. Thinking that he would obviously be first, he went off to the side and napped. However, when he woke up, three other animals had already arrived. One of them was the Ox he had always looked down upon. Rabbit learnt a huge lesson that day, one it cherished forever. Financial planning isn’t about getting rich quick or being the first to the finish line. It is designed to help you sleep at night, reduce your stress and protect your future.  You can either be in charge of that yourself or you can enlist a professional, who just like a family member or friend, will be there for you at the hour you need help the most.

The value of investments and the income they produce can fall as well as rise. You may get back less than you invested.
Tax treatment varies according to individual circumstances and is subject to change.
Inheritance Tax Planning is not regulated by the Financial Conduct Authority.

Author: Andy Lei

Editor: Cherie-Anne Baxter

Date of article: 18th January 2023

Approver Quilter Financial Limited 20/01/2023

Get in touch

Close
Next

The information collected will be used solely for the purposes of providing background information when contacting you to arrange an appointment.