The Client
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Pamela is aged 60, lives in Hertfordshire, is retired and has no children. She was married to George, who sadly died unexpectedly.
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George had largely taken care of financial matters in the past, but now Pamela was faced with having to make complex financial decisions about her affairs and assets totalling around £1.75m, which was very daunting and overwhelming for her.
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She was still very upset about losing George, but decided she needed to seek professional guidance as to the best way of managing her affairs and assets.
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Following previous advice from George and her own instincts, she decided to contact a professional, fee only firm, which could offer proper financial planning and wealth management.
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This is because she did not want to fall into the hands of the banks or salespeople; rather she wanted to develop a working relationship with a firm who were sympathetic, understanding and most importantly, interested in her rather than her money.
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Pamela and George had accumulated a wide variety of assets and investments over the years, which were scattered across many different institutions. Pamela did not know whether these investments were still appropriate for her and found it virtually impossible to understand and manage them.
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She was also unsure as to what her lifestyle would be like now that she was single and how much she could realistically afford to spend each month, as George had received almost all of their household pension and investment income, and had always taken care of the bills.
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Pamela was keen to ensure that upon her eventual death, her estate would be distributed in the way that she (and George ) would have wanted. She also wanted to pay as little tax as possible, both in life and on death.
The Challenges
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To simplify Pamela 's affairs to make them much easier to understand and deal with.
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To establish the true nature of Pamela 's financial position and to provide clarity on the lifestyle she could afford to live.
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To assess the appropriateness of Pamela 's investments, taking account of her overall financial position, her aims for the future and her feelings towards risk.
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To help ensure that Pamela 's estate would be distributed in accordance with her (and George's) wishes - and in a tax-efficient manner.
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To provide her with the support she needed to help her through a difficult time in her life and beyond.
The Actions
- Constructed a bespoke financial plan for Pamela that clearly showed her what she could comfortably spend - which transpired to be much more than she thought would be possible.
- Restructured her portfolio to make it more appropriate for her, in terms of risk, cost and simplicity.
- Encouraged Pamela to ensure a Will was drawn up immediately which reflected her and George 's wishes and would ensure the passing of her estate the charities of her choice free of tax, rather than to HMRC.
- Explained the details and helped Pamela to implement gifts to charity, which reduced her income tax bill and enabled her to do something she really enjoyed.
The Results
- Pamela feels reassured that the lifestyle she is used to and enjoys can continue, without her having to worry about money.
- She understands her affairs much more now and is pleased to have passed the responsibility for managing them to professionals she can trust and can work with on an ongoing basis.
- She is now exposed to less volatility in her investment portfolio and captures more of the available returns, instead of taking unnecessary risks and paying high management charges.
- Pamela enjoys the satisfaction of making charitable donations whilst she is alive and well, rather than when she has passed away, safe in the knowledge that she can afford to do it.
- She has the peace of mind that her estate will not be liable to Inheritance Tax and will pass to those she wishes to benefit from it.