A main priority for many parents today is to secure their children’s financial future. By implementing the right investment strategies early on, you can more effectively grow wealth for your children and help them build wealth resilience for the future.
So, how exactly can this be done?
This article explores various strategies you can put in place to help future-proof your children’s wealth, ranging from the benefits of financial advice and planning to using a child investment account and online tools.
Financial Advice
Before embarking on any investment journey, such as building wealth for your children, one of the most important things to consider is seeking professional financial advice.
Financial advisors will be able to accurately assess your family’s financial situation, including aspects such as income, future goals, and risk tolerance.
This allows them to recommend suitable investment strategies that are tailored to your unique circumstance and targets for your children. They can also provide insights into things such as tax-efficient investment options and help you navigate complex financial processes – such as opening and managing accounts.
Financial Planning
In addition to seeking advice, it can be highly beneficial to build a comprehensive financial plan.
This involves setting clear objectives for your children’s future and then outlining the steps necessary to reach these goals.
For instance, you may have goals for your children, such as funding higher education or obtaining a deposit for their first home. This way, you can craft the right investment strategies with these goals in mind and regularly review and adjust them to remain aligned with your changing financial circumstances.
Junior ISAs
If you’re looking to future-proof your children’s wealth, one type of child investment account to consider is a Junior Individual Savings Account (Junior ISA).
This is a tax-efficient savings vehicle that’s designed specifically for children under 18. Parents, grandparents, and other guardians can make yearly contributions to the account to grow the child’s savings. As of the 2024/25 tax year, the annual Junior ISA allowance is £9,000, and all returns are free from income tax and capital gains tax.
There are two types of Junior ISAs, one being a standard cash Junior ISA for saving, and the other being a stocks and shares Junior ISA that lets you grow your child’s wealth with potentially successful investments.
Speak to your advisor to determine what types of diverse investments you can consider that are suitable for your future goals and appropriate risk levels.
Online Wealth-building Tools
With modern wealth management firms moving onto online platforms today, it can also be beneficial to look into the many tools they offer. Wealth-building tools can help you more effectively identify, plan, and manage investments for your children’s wealth.
These platforms provide user-friendly interfaces to set up and manage accounts such as Junior ISAs, where you can monitor investment performance and adjust strategies where needed. Consult your advisor to discuss what tools you might benefit from and how to access them.
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By leveraging these strategic investment tips, you can have a more effective approach in place to future-proof your children’s wealth. This can help provide them with a solid financial foundation to support their aspirations and navigate the financial aspects of adulthood.
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Please note that the value of your investments can go down as well as up.