We have held off writing this piece pending developments in the ongoing conflict in Ukraine. It now seems clear that an early cessation of the conflict is unlikely and hence we wanted to reassure you in respect of the impact on your financial planning arrangements.

World stock markets remain particularly volatile. Under rules that were introduced in 2018, you may receive a notification from us that the value of your portfolio has fallen by 10% or more since your last quarterly valuation. Many clients received such letters in the early stages of the covid crisis so you may be familiar with this. Whilst such an event is unwelcome, many of you will have experienced market downturns before now and know that the best course of action is to sit tight and wait for the value of your portfolio to recover. One of the main reasons that we show performance graphs in our review meetings is to demonstrate that market falls are not unusual, that recovery follows, and the long-term trend has been upwards.

The unknown in any market downturn is how long a recovery may take to materialise and we cannot begin to forecast this in respect of the Ukraine conflict or any other downturn. However, we aim to mitigate the risks of such downturns by means of our financial planning incorporating cashflow modelling. The following planning mechanisms are common to all Financial Plans that we create and will vary simply with personal circumstances:

• We recommend that all our clients hold a reserve of accessible cash savings that feels comfortable in all foreseeable circumstances. This means that if some form of emergency arises there should be enough in savings to cover that need if investments markets happen to be down.

• For larger cashflow needs, we always ask clients what major expenditure plans there may be over the next few years and then plan to have that cash available in advance. Again, this avoids the need to sell investments at an inopportune time.

• Where regular withdrawals are being taken these are usually set at a level whereby they can continue regardless of market downturns. The sustainable withdrawal level that we recommend is a long-term average that takes account of such events.

Using these mechanisms means that in the vast majority of circumstances clients can rest easy during a market downturn. But if you remain concerned you can consider the following steps:

• Defer any expenditure if possible until markets recover and then take a withdrawal from your investments.
• Reduce or stop withdrawals from investments, using cash reserves in the interim until recovery.
• Take a withdrawal from your investments in the full knowledge that the value will not be as high as it was a few months ago.

Of course, if you are considering further investment then investing when markets are low can be a benefit. Those making regular contributions to their investment and pension portfolios will be buying more units for each contribution made.