Financial Management - Case Studies

Case Study 1

With ten years until his retirement Client A inherited funds following the death of his mother. From outset he was intent on investing these monies and indeed had received a detailed proposition from another financial adviser outlining how best to invest the funds. He came to us for a ‘second opinion’. The plan on the table neglected the fact that Client A had an outstanding mortgage. It also neglected the fact that, although a higher rate tax payer, Client A had little in the way of retirement planning.

Our solution was to fully repay the outstanding mortgage leaving Clent A with over £1000 per month at his disposal and some surplus inheritance. We consolidated his existing retirement plans and implemented a regular pension commitment to benefit from the significant tax savings available and ensured that Client A, and his wife used their ISA allowances for two consecutive tax years, providing them with a tax efficient investment base on which to build.

Client A recognised both the benefits to him in the medium to long term but also the fact that our adviser fee was a third of the potential commission proposed by the original financial adviser.

Case Study 2

Client B was a client of a large city private bank. As such, she thought she was receiving a highly personalised service. Her accountant was not convinced and asked us to have a closer look at her portfolio management.

We established that the portfolio was not running as Client B thought it was. The managers had failed to utilise annual allowances and had taken a fairly aggressive investment approach with her investment funds which had not, despite being invested for a number of years, shown any significant level of gain.

We proposed a restructuring of the portfolio along very strategic lines. Most importantly, we addressed the question of Client B’s investment outlook and established with her a suitable investment spread. We also refocused the portfolio on her investment objectives, Client B had two years until her retirement therefore we began to focus more on her income requirements than previously.

The overall result was to provide Client B with a more efficient financial portfolio, with much less investment risk and which was focused on her own particular objectives.

We have continued to review the position of the portfolio with her on a regular basis and despite the ups and downs of the investment market she is far happier with the position of her investments and knows she can call on us at any time.

Case Study 3

Client C is the director of a medium sized manufacturing company. He offers his employees membership of a Group Personal Pension scheme. To date the take up rate amongst his 60 employees has been mixed. Client C was frustrated because he knows the importance of ensuring a sound financial future and is more than happy to contribute a significant percentage of an employees salary if they join the scheme.

The existing IFA has not been seen for some years and the firm receive little by way of correspondence from them.

We proposed to Client C a pension management contract that is designed to provide his employees with far more information about what the scheme offers, how it works and the undertakings required to be a member of the scheme. We also offered, as part of the management contract, a series of clinics, allowing his workforce the opportunity to meet briefly with ourselves to clarify any issues that might be important to them.

The management contract has been a huge success. Membership has increased from 15% to 80% with employees taking a far more active part in the discussions relating to their pension issues.

The management contract was paid for by the employees agreeing to a salary sacrifice arrangement by which the employer saved National Insurance contributions on the level of contributions that employees agreed to sacrifice.

Important Notice:
The value of investments and/or pensions can fall as well as rise and you can get back less that you invested. Levels and bases of and reliefs from taxation are subject to change and their value depends on the individual circumstances of the investor.