We work best with clients where we can add most value. This is likely to be people who have more complex situations such as:
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Typical issues our clients want answers to are:
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Case studies
The professional’s early retirement
The challenge
George was a senior manager in the public sector. He was starting to suffer from stress as the project he was involved in hit increasing difficulties and he was attending meetings, all over the country, that often went late into the night or over weekends. At the same time his children were leaving school for university and he wanted more involvement with this process, alongside his wife Jean. Finally, his mother had become seriously ill and he wanted to give her time he hadn't got.
The investments he held with Jean were unstructured and their bank had advised them to invest exclusively in UK equity funds through a series of investment bonds. Although balanced investors, the overall risk rating still exceeded their profile. Also, each transaction had been done in isolation so that the overall portfolio was complex, expensive and unbalanced.
He wanted to retire, but did not think it was viable until his children were financially independent.
What we did
Using cash flow modelling, we were able to show them that he could afford to retire now. By using some of their capital to bridge the gap until their pensions started, they could maintain their income and lifestyle.
We demonstrated that their investments were more risky than they realised and restructured to a more appropriate asset mix. By changing the way these investments were held, we were able to reduce tax and charges to produce a largely tax free regular income.
The result
George has used his skills in the voluntary sector for a few hours a week and is enjoying the garden for the first time in years. Together they have had the time to help one daughter choose a university course and made a trip to visit the other daughter, working in India, during her gap year.
When his mother passed away, George had the consolation of having seen her more in the time they had left together. He has also been able to consider passing some of his inheritance onto his daughters, because he and Jean now know what they need for their own retirement.
Through our portfolios, both capital and income have been maintained in spite of the recent economic turbulence.
All this started with a plan that cost less than a university term’s fees.
The business owners’ overdue retirement
The challenge
Michael and Karen ran a local restaurant for many years. Although they still enjoyed it overall, they were finding the long hours more tiring as they got older. Another problem was that their children, having worked in the restaurant whilst growing up, had all developed careers away from the business. Karen was especially missing her son and grandchildren, who had recently moved away from the area.
The tie of the restaurant was stopping them seeing their family and the business was too small to support a manager and besides, Michael did not want to risk his reputation by delegating control.
They had a number of small pensions, taken out many years before, as well as some ISAs. However, their main investments were in property and they owned both the family home and their business premises outright.
They were ready to sell the business, but did not know if retirement was viable or how much they needed to get.
What we did
We established how much capital was needed and that the retirement they wanted was achievable. By drawing up a plan and using cash flow modelling, we were able to show how they could achieve the income they needed, with maximum tax efficiency and minimum risk, to suit their cautious risk profile.
We were able to help them make sense of their pensions, maximise their savings by adding to them and get the best terms for future income payments. Using “what if” scenario planning, we looked at downsizing the family home, both to improve lifestyle and make gifts to the children, which they wanted to do if possible.
The result
They sold the business first, to a family friend who was keen to leave her job and set up on her own. Then they sold their home and bought a newly built house, almost within budget, closer to the centre of town.
Guaranteed pension income, that meets their living expenses, has given them the security they wanted. It has also allowed them to take a more balanced view on their investment portfolio and still be comfortable with the level of risk. In turn this has reduced the amount of capital needed to make the plan work. Therefore, they have been able to make larger gifts to ease their children’s’ finances at a difficult time.
They have peace of mind because their investments have fared well in a difficult climate and their family have benefited as well. They are now enjoying their retirement and spending quality time with their children and grandchildren. Their social life has also blossomed without the constant tie of the business.
All this came from a plan that cost less than a night’s takings in the restaurant.
The manager’s redundancy
The challenge
Paul and Sue had been clients since 2002, when he sought advice about his pensions following being outsourced to a quango. Although we advised him to keep his preserved public sector pension where it was, we did consolidate £40,000 of other smaller pensions into a better managed alternative.
We also outlined why he needed to join the new scheme on offer and how he could maximise the benefits, even though he was reluctant to do so.
In 2010 Paul was made redundant and needed urgent advice to review our ongoing planning.
What we did
Using cash flow modelling, we were able to look at various “what ifs” and make sense of what kind of salary he needed, from a new job, to achieve different goals. We consolidated his work pension (£35,000 from £8,000 net contributions) into his pension with us, which had grown to £125,000.
We arranged a tax free lump sum of £40,000, which was used to repay their mortgage and reduce outgoings significantly. We also arranged for an income to start, if a new job was not found before his redundancy payment was used up.
The result
Paul ended up taking a part time job locally within 4 months. Although the salary was much lower than previously, his after tax position was less of a problem, especially with the mortgage gone. Sue was happy to extend her hours at work, as Paul was able to help around the house and therefore she didn't’t lose leisure time.
They are relaxed about working 2 or 3 years more than their original plan, because their quality of life has improved so much. Paul never took any pension income in the end and was actually able to put some redundancy money back into a pension for Sue.
They have found their lifestyle unaffected by the small economies they made. It may even reduce the projected retirement date when we model the cash flow at our next review.
Paul and Sue understand the benefits of our investment approach now, as they would have had a pension value of only £47,000 without our advice, compared to the £160,000 they actually had to work with.
Testimonials
Here are some of our clients’ thoughts
on what we do
Mr & Mrs B of Stevenage
Kevin and I would like to thank you so much for your help and assistance with our so called ‘nightmare’ of getting Mortgage Protection. If we have any friends or family who have to go through what we have experienced, then we know we can rely on yourselves to help out. Once again many thanks to you and your company.
Ms R of London
Thank you both for all you’ve done for me, I am truly grateful, with all the rush going on I forgot to say the most important thing for helping me reach this far. Thank you.
Mrs S of Baldock
Many thanks for excellent attention to detail as ever.
Mr & Mrs M of Hitchin
Thanks for all the hard work that you’ve put in to make our dream a reality.
Mrs W of Hitchin
Many many thanks to you both for your professional and courteous advice. I am reassured in the decision I have made and can relax now I’ve planned for the children future in such a positive way.
Mrs B of Hitchin
Thank you for all your hard work and good advice. I could never have found my way through that minefield without you! Thanks again.
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