How should I approach investing business-sale proceeds?

Give each part of the money a purpose

Write down which money is needed for obligations, which supports the next stage of your life and which has a longer horizon. A tax payment next year and a possible legacy in thirty years are different planning problems. Account labels alone do not establish whether an investment is appropriate for either.

Also distinguish willingness to take risk from ability to absorb loss. Building a business may have made you comfortable with uncertainty, but the consequences of losing capital can change once that capital must support your household. Ask how a fall would affect actual plans, rather than relying only on a risk questionnaire score.

Reference: FCA: Five questions to ask before investing

Look through the products to the underlying risks

The FCA describes diversification as spreading investments across different kinds of assets and markets to reduce dependence on a single outcome. Several accounts or funds may still hold similar investments. Ask what you ultimately own, where the concentration lies and how the proposed mix might behave in a difficult period.

Diversification cannot remove investment risk. Also examine liquidity: how you can withdraw, whether sale is guaranteed, and whether notice periods, restrictions or penalties apply. A product that appears stable on a statement may still be hard to sell when you need cash.

Reference: FCA: Diversification

Request a proposal you can compare

Ask for the reasons behind the recommendation, the alternatives considered and all costs in pounds as well as percentages. Separate initial advice, ongoing advice, platform, fund management and any exit costs. As a simple illustration, 1% of a £2 million portfolio is £20,000 a year before changes in value; that is arithmetic, not a statement of a typical or fair fee.

Ask what the ongoing service actually does: planning updates, tax coordination, investment monitoring and contact arrangements. Clarify who makes decisions and how you can end the service. MoneyHelper explains that regulated financial advice involves personalised recommendations and that charges should be explained before you commit.

Reference: MoneyHelper: Do I need a financial adviser?

Verify the firm and understand the protections

Check the firm's identity and relevant permissions using the FCA's official services, and use verified contact details. Authorisation does not mean every product it mentions is regulated or suitable for you. Compensation arrangements also do not cover ordinary losses simply because an investment performs badly.

Be clear about any decision to invest in stages: what dates or conditions will drive it, what happens while money waits, and how you will avoid repeatedly changing the plan with headlines. Neither staged investment nor immediate investment guarantees a better result. This guide offers evaluation questions, not a recommendation to buy a product or use a particular allocation.

• Write the purpose and time horizon for the capital.
• Measure a potential loss against household needs.
• Check underlying diversification and withdrawal terms.
• Request all fees and service commitments in writing.
• Verify firm permissions and the scope of any protection.

Reference: FCA: Check a firm or individual is authorised