man standing infront if building


It’s a question we get asked a lot – in a market where misconceptions and bad advice are rife.

The better question might be, is there ever a bad time to ask for financial advice? Because the answer is always a resounding: “No”.

In fact, there’s a strong case for saying that individuals need help with wealth management now more than ever. At all levels of society, the complexities of managing our money, and the seemingly endless changes to regulation of tax and other assets, is leaving people confused.

This study featured in IFA Magazine reveals almost three-quarters of Brits struggle with it. And that means most people probably won’t be aware that good financial management isn’t something you can simply leave until later in life. Or that poor decision-making (or believing bad advice) can have disastrous consequences. Perhaps even worse, you’re far more likely to fall foul of fraudsters if you don’t wise up about bogus investment opportunities.

But most of all, you’ll lose a prime opportunity to protect your lifestyle, preserve and grow wealth with the simplest – and cheapest – planning available.

Regardless of your age, professional seniority, existing wealth and personal values, seeking advice is the first step towards sounder finances. There are three stages to tick off so that you can do this, and there’s no reason why you can’t start now:

1. A wealth management mindset shift

Contrary to popular belief, a good adviser’s contribution to your personal and family wealth goes beyond what’s listed in your client agreement.

It’s the detailed answer to your question on a particular protection plan, investment option or tax quandary. It’s an insight into shareholder agreements, knowing the consequences of selling a business, and being conversant on trusts. And it’s about the resourcefulness of an adviser who can wrap in the right experts to soothe your pain points – even those which weren’t on your radar.

The first building block in firmer financial foundations is a shift in mindset about the purpose of wealth management. We’re not here to make you rich (or richer). We won’t focus solely on investment performance, like most advisers do – because there isn’t much we can do to manage the markets.

What we can do is put in place optimal principles, tailored to your unique individual circumstances, that:

  • prioritise your concerns
  • promotes your values
  • protect your lifestyle
  • prevent costly mistakes
  • preserve more of your wealth

2. Taking stock of your financial situation

To help us work out the opportunities and threats to your wealth’s wellbeing it’s useful to answer the following questions – and consider when’s the best time to engage us:

  • Do you have sufficient emergency cash? If not, build it and come back to us.
  • Do you have appropriate protection plans? If you don’t have these in place, we may be able to help you directly or point you in the right direction.
  • Are you aware of how your Death In Service (DIS) employee benefit can impact your inheritance tax (IHT) and succession planning? No? The good news is that the monies paid out into the estate are IHT-free as the DIS is already held under trust. However, the issue arises on the eventual death of the beneficiary at which point unspent funds would be liable to generational IHT. Furthermore, because the funds have exited the trust and not been loaned from it, this exposes the DIS proceeds to a range of third-party threats.
  • Do you have an idea of your capital needs over the next five years? Great – that’s the amount you can’t afford to risk.
  • Have you thought how much income you need in retirement? If the answer is no, you need some coaching.

3. Spend some time charting your life plan

With the best will in the world, your financial adviser may struggle to make their expertise count unless you provide some vital information upfront.

Don’t worry, we don’t need chapter and verse at the outset. This is about creating a conversation aid that gives us an overview or your current financial details, your dependants and your dreams.

There’s obviously far more we’ll need to know in due course, but we wouldn’t expect you to come armed with all of the information when we first speak. An initial helicopter view of your situation is enough to provide insight into the amount of capital you’ll need, set against your level of disposable income today.

This enables us to explore your financial hopes and concerns more thoroughly, together with you. If you’re unsure where to start, ADL’s My Life Plan Chart is an excellent tool to sketch out your plans for the short, medium and long-term future, in areas that include your family, career, property and plans for retirement.

Cases in point: three clients we’ve helped

Here’s a quickfire look at just three people we’ve helped.

A healthy plan

Our client and his wife, both 70, have a main residence valued at £400,000 and nine investment properties valued at £1m altogether. They also have ISAs of £300,000; pensions worth £550,000; and a joint life policy for £120,000.

Concerned about their health and using rental income as a primary source of funding their retirement, they wanted to tackle a £328k IHT liability to help their beneficiaries.

In response, we have identified surplus income; arranged specialist wills, trusts and Lasting Powers of Attorney; and determined the best way to reduce IHT and redirect surplus rental income, via an equity settlement into trusts and holding over the gain on the properties into the trust, as per s.260 Taxation of Chargeable Gains Act 1992.

In addition, we reviewed the couple’s existing pensions. We determined that by reducing the overall charges without compromising on investment strategy, sufficient rental income could be given up. The amount of rent given up was associated with the equity settled into trusts.

Tour de force

We helped a non-resident, non-domiciled director and shareholder of a successful, UK-based tour operator company holding >$2m ‘surplus funds’ in cash. 

He prefers not to repatriate the funds to his own, politically volatile country. His key objective is to lower the IHT bill on the business cash to protect the cascade of wealth to his children and grandchildren.

We considered an Excluded Property Trust and a Qualifying Non-UK Pension Scheme (QNUP) to ensure the funds would come under a strong financial services jurisdiction – outside of the UK IHT regime.

Ringfenced retirement

A 79-year-old, divorced farmer wanted to protect her wealth for her two sons – but lived in a farmhouse with 195 acres of land, presenting a potential IHT bill of £2.4m. This was a complex situation where we needed to consider:

  • whether the farmhouse really was a farmhouse
  • if Agricultural Property Relief (APR) applied to the land
  • whether, on sale, the client would lose IHT exemptions

We determined the farmhouse and 25 acres did not qualify for APR. It meant those assets could be ringfenced and sold to help fund the new home she desired as well as her long-term needs.

But the IHT issue remained – so speed and efficiency were key to protect the client’s wealth. Our advice included a wide range of options:

  • Whole of Life insurance policies; it often makes sense for large life policies to be structured as multiple policies of £250k each
    • Strategic settlements into discretionary trusts during lifetime
    • Flexible Lifetime Annuity via a Protective Cell Company

We set out the cost-effectiveness and the risks of various options. For instance, the risk of the client not surviving for seven years. But we ultimately determined the cheapest option inclusive of all fees; not just our advice fees, but also related-product provider fees, would be significantly lower than the IHT bill.

These three client stories exemplify the breadth of opportunity on offer from detailed and prudent financial planning. It’s also worth noting in the ‘farmhouse’ case, if the client had sought our advice sooner, her savings would have been greater…there really isn’t a bad time to seek our advice.

To book a free 30-minute consultation and to ‘MOT’ your finances today, fill in the below form or make an appointment on Calendly

Recommended Posts