Case study: Premium

Financial planning advice on how best to position your investments to generate an income in retirement.

Setting the scene Initial considerations How we can help Outcome Our service

Meet Mr and Mrs Davis who have accumulated significant savings across a variety of accounts. Mr Davis has recently retired, although he may pick up some light work over the next couple of years. Mrs Davis will continue to work for the foreseeable future.

They approached Crowe Financial Planning as they would like financial planning advice for the following:

how best to position their investments to generate an income in retirement
their concerns about Inheritance Tax and how this might affect their two children
the existing financial protection policies held by Mr Davis.

In terms of assets held they hold:

£2.6 million across 18 different investments including various investment accounts, tax-efficient investments, rental properties and individually held shares. Many of the existing portfolios are holding nearly 100% in equities.

Mr Davis has previously made the bulk of the investment choices and is comfortable investing in high-risk assets but Mrs Davis is not a comfortable investor.

Initial considerations

Both are seeking security in retirement, they want to see what level of retirement they can feasibly sustain over the longer term and what level of lifestyle this facilitates.

They are looking to achieve tax efficiency both immediately in terms of the income taken, this could encompass utilising unused allowances available to them and over the longer term optimising their inheritance tax efficiency. Leaving a legacy is important to them and ensuring their estate is protected where possible is clearly a priority.

As Mr Davis is seeking an income immediately, they are looking for some level of capital growth to mitigate the level of withdrawals taken and to help preserve the estate for their children. There needs to be an in-depth conversation here around risk and investment options as they both have differing attitudes and levels of comfort. We need to take steps to empower Mrs Davis to ensure she participates in the conversation as well as Mr Davis.

Ultimately, they have sought professional advice as they want reassurance, professional support and expertise to help them achieve the above.

This will provide the assurance that we will help them whatever happens in the future.

How did we assist Mr and Mrs Davis?

We listened

Arguably the most important part of the financial journey, we spent time to understand what was important to both Mr and Mrs Davis.

Through this stage, we asked them to define what good looks like to them, what they are passionate about and where they want to go and why. This helps us shape the financial plan and ensures the planning process is collaborative and outcome focused.

We assessed

A full review was completed of the existing investments for suitability, charges, asset allocation and performance. This included contacting each of the providers, collating the information and analysing the data.

We looked at the strengths and weaknesses, opportunities, and risks within their current structure.

Arguably the most important part of the financial journey, we spent time to understand what was important to both Mr and Mrs Davis.

We looked at the strengths and weaknesses, opportunities, and risks within their current structure.

We informed

A full income strategy and cash flow analysis were completed, showing that their target expenditure is potentially achievable.

Following our initial analysis, we ran through the options available to them and how to optimise their plan to best align with their ‘ideal’ financial journey.

We implemented change

Our recommendations were provided and implemented, as we are completely independent, the open market was researched to find the best solution available for Mr and Mrs Davis.

These solutions will be managed in line with their attitude to risk and long-term objectives.

A full income strategy and cash flow analysis were completed, showing that their target expenditure is potentially achievable.

Following our initial analysis, we ran through the options available to them and how to optimise their plan to best align with their ‘ideal’ financial journey.

Our recommendations were provided and implemented, as we are completely independent, the open market was researched to find the best solution available for Mr and Mrs Davis.

These solutions will be managed in line with their attitude to risk and long-term objectives.

Outcome

Mr and Mrs Davis sought professional advice as they were unsure about the options available to them, structurally, we optimised their plan by:

simplifying their plan through appropriate consolidation
this increased the transparency of costs and performance
ensured they have a unified, cohesive investment strategy aligned to their on-going objectives and attitude to risk
immediate tax efficiency to utilise allowances available and to manage their current capital gains and income tax liabilities when seeking an income of £60,000 net per year
long-term tax efficiency by exploring inheritance tax planning
initiated an ongoing advice service to ensure through improved monitoring and professional advice their plan remains on track.

Further benefits to the planning process

Peace of mind

Agreed level of income is sustainable over the longer term and quality of life can be maintained providing emotional security far into retirement.

Clarity

Detailed explanations to give a clear understanding of what their plan looks like and providing the options available to them.

Informed and empowered

For both parties to be involved in the discussions while making prudent financial decisions.

Legacy and family

Working hard to build their estate, protecting it for the next generation through initial and ongoing plans.

Peace of mind

Agreed level of income is sustainable over the longer term and quality of life can be maintained providing emotional security far into retirement.

Clarity

Detailed explanations to give a clear understanding of what their plan looks like and providing the options available to them.

Informed and empowered

For both parties to be involved in the discussions while making prudent financial decisions.

Legacy and family

Working hard to build their estate, protecting it for the next generation through initial and ongoing plans.

Through engaging with Crowe Financial Planning, Mr and Mrs Davis were able to retain control of their narrative, ensure their plan is working hard for them and aligned to their wants and needs. This enabled them both to get excited about their next phase of life and embrace retirement in full.

The client names used in this case study are fictitious, but the actual advice case is a true example of the way in which Crowe Financial Planning UK Limited can help clients.

You should remember that the value of an investment and the income from it could go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.

Premium service

What was the cost to deliver this advice with an ongoing service?

Our initial advice fee for the recommendation and implementation was £19,500.
Our ongoing advisor charge will be 0.50% per year, based on the value of their assets under our management.

The portfolio research and analysis took four to five weeks, with the recommendations and report production taking a further two to three weeks to put together and write.

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