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Case Studies...

Case Study 1

Client Scenario

“I’m a marketing manager with a final salary pension and other pensions I have built up over the years. I’m approaching retirement and really don’t know what the best thing to do is. I’m married and have two grown up children. My wife doesn’t have a great deal in pensions so the burden is likely to fall on my arrangements.”

What Did We Do?

We had an initial meeting with the client and his wife to understand their current position and, perhaps more importantly, what they wanted their future to look like. This was a really enjoyable conversation and we learned a great deal about what motivates them and what their passions were. Just talking about the future was of great value to them since they rarely had the opportunity to do so.

We prepared some projections for them and an easy to follow report that captured their current situation and considered the various pros and cons of each course of action open to them. All of this was done in the context of our initial conversation with them, working towards what was important to them and how their dreams could be fulfilled.

Our Recommendations

Our advice was that they take pension benefits from his final salary scheme because it offered them a guaranteed base level of income (and protection for his wife on his death) which covered their projected outgoings.

We also recommended they transfer their other pensions in to a drawdown arrangement. By taking the drawdown option, they were comfortably able to take a modest regular income to top-up his final salary pension but also lump sums (which we manage from a tax point of view) to cover the ‘exciting’ things they wanted to do.

We manage their drawdown fund and provide our ongoing services which they really value. All of the advice we have given them and will continue to give them is with their goals and objectives in mind. As these change, we adapt their long term plans to accommodate this.

Case Study 2

Client Scenario

“I have been self-employed all of my life. The idea of retiring is quite scary. My husband is looking to retire in 5 years and I had always planned to do the same. I’m worried about having enough money and also what I will do all day!!! I’ve been used to working long hours in a really fulfilling business and I fear retirement might leave a void. I have 4 pensions but I’m really don’t know much about them and whether they are any good.”

What Did We Do?

The driver for our advice was based on how she saw her retirement and what she felt she wanted to do with it. Talking it through with us helped her to realise that there were actually many things she had always wanted to do but never had the time for. She shared many interests with her husband but pressure of work meant they could never really fulfil them and they fell to the wayside.

Once she realised that retirement may not be the vacuum she perhaps thought it was, we then started talking about the financial side of things and how she might be able to pay for some of the things on her new ‘to do’ list. She still had time to think about her retirement and felt much better about the prospect, provided the sums were going to add up.

Our Recommendations

Based on the amount of investment risk she wanted to take and other important factors that were important to her, we recommended that she consider replacing her existing pensions (which were causing her some hassle and concern) with a single pension which involved lower charges, a more logical investment strategy and a great deal of flexibility.

We helped her to manage the transition to the new pension and protected her, as much as possible, from the administrative burden, something she really appreciated. We now provide her with an ongoing review service that helps her to stay focused on what happens after she finishes work, something she is now very much looking forward to!!!

Case Study 3

Client Scenario

“I have a final salary pension from an employer I used to work with. I think it is a good one but I’m not really sure. I also have other investments and I want to know what the best option for me will be when I retire in 18 months. I am single with no dependants.”

What Did We Do?

This was a chap who was unhappy in his work. He was looking forward to spending time overseas with friends and in his garden, something that had become neglected due to the long hours he worked. He had set 18 months as his retirement age because that seemed sensible but he didn’t really know why!!!

We agreed to do some work to find out where he stood and if his estimate of when to retire was realistic. Stable income was a priority for him and accessible cash was also important to fund trips abroad, he did not have a significant appetite for investment risk.

Our Recommendations

After assessing his arrangements, we shocked him. Based on his income and capital needs, it was our view that he didn’t need to wait 18 months and that he could achieve ‘freedom’ now!!! He was shocked and slightly nervous about this situation but, over a relatively short space of time, he made some significant decisions.

Keeping his final salary pension and drawing benefits from it was part of what we suggested since this provided him with a stable, inflation linked base income. In addition, we recommended a more logical investment strategy for his investments, align with his attitude towards risk and his ability to withstand losses when markets do not do what we want them to.

He now feels happy in his new life and is pursuing what he wants to without the stress of the financial side of things. Of course, he remains fully engaged in his investments but leaves the day-to-day stuff to us so he can focus on far more important things………enjoying his life!!!

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