Case Studies
The following case studies are based on clients' specific circumstances and should not be viewed as advice. Please ask us for independent financial advice before embarking on a course of action.
Lifestyle Financial Planning
Rob and Margaret Wood, aged 45 and 44, a pharmacist and a teacher, recently inherited £150,000 following the unexpected death of Margaret's mother 12 months ago. On the recommendation of their solicitor, they made an appointment to discuss investments.
During the initial meeting, we discovered that Rob and Margaret have three children, aged 9, 13 and 15, a nice home, household income of £80,000, savings and investments of £120,000 (in addition to the £150,000 inheritance). Their initial request was to receive a ‘good return' on their money. However, they felt embarrassed about not understanding investments, despite being intelligent and after endless reading of the financial pages of the Sunday newspapers, on the advice of which they had bought some of their previous investments.
Read more here
Financial Cash Flow service
Mr & Mrs G, small business owners in their mid 30's, came to see us for an initial meeting. They were busy running their business but over the years they'd accumulated some savings, some ISAs and some modest pension funds. No particular plan or strategy, just whatever they'd been sold at the time. In this respect, they were similar to many people. They had a vague idea that they could do better and that they needed some financial planning advice but didn't know what that looked like or how it might work. However, they were very clear that they didn't want a product salesman selling them yet another financial product that they didn't understand and weren't sure they needed.
How did we help?
We offered Mr & Mrs G our Financial Cash Flow service. This is a scaled down version of our full Lifestyle Financial Planning service. Through a process called LifeplanningTM we helped Mr & Mrs G to work out what they wanted to do with the rest of their lives. Then we got to work on the number crunching - the financial planning. We took into account Mr & Mrs G's current and projected income, expenditure, assets and liabilities. Based on the clear picture of their lives that we had established at the LifeplanningTM stage, we put together a lifetime cash flow projection that showed them exactly what they needed to earn, save, invest and spend over their lifetimes to achieve and maintain their desired lifestyle. We also gave them a clear idea of how their business fitted into all of this and how much they would need to extract or sell it for, taking into account their other financial assets.
This gave them peace of mind and a sense of direction, both with their personal finances and with their business. They knew what they needed to do and why they were working so hard. For the first time, they could understand their finances and see how their financial decisions would impact on their projected financial future.
When they are ready, we will move on to providing the independent financial advice that they need. Now, any financial decisions will be easy to make: they just need to refer to their plan and ask "will this proposed action move us closer to our goals or further away from them?" They realise that receiving independent financial ‘advice' without a financial plan of action was the mistake they'd made in the past.
Buying financial products is not the same as financial planning. Buying financial products is something that you do after the financial planning. Most so-called financial advisers don't understand this.
Enhanced pension annuities
Gareth recently advised Mr & Mrs J about taking Mr J's pension. They are both 65 and Mr J's pension fund was worth £78,000. They were concerned about investment risk and wanted a guaranteed lifetime income from the fund to supplement their other income during retirement.
How did we help?
Gareth had an initial meeting with Mr & Mrs J to explain our services. He then completed a confidential questionnaire with them, listening carefully to their needs and concerns. He established that Mr J had some health issues, none of them particularly serious.
Gareth advised Mr & Mrs J to use the Open Market Option in their existing pension policy, enabling him to shop around on their behalf to obtain the highest income rate in the market place. Taking into account the medical issues, he obtained an even higher income for Mr & Mrs J. He secured an enhanced annuity of £3,822 per annum rather than the £2,911 annual income that Mr J had been offered by the original pension company.
It pays to take advice when coming up to retirement, rather than accepting the pension offered by the pension company you've saved with.
Investment Planning Service
Mr S, a retired 66-year old, married man recently came to see Gareth as he had two issues regarding his savings and investments. Firstly he had three maturing building society bonds which required attention. These had originally been placed on fixed rates approaching 5%, just before the interest rate reductions in 2008, and he was now looking at replacement rates nearer to 3%. Secondly he had a portfolio of investment that had been accumulated over the years but had not been reviewed since the day they were taken out.
How did we help?
Taking into account Mr S's need for income to supplement his pension, Gareth put together an investment portfolio which gave Mr S a good balance between capital security, income and potential for growth together with a review schedule to ensure his future needs and potential changes in circumstances are managed and not just left to chance.
Yates & Co's Investment Planning Service has been carefully designed to meet the needs of clients with between £25,000 and £200,000 in cash and investments. The key benefits of this service are:-
- Expertise: we have researched and brought together some of the world's leading investment specialists to help us to provide this service.
- Choice: additional fund choice, not usually available to the retail investor.
- Ease of transactions: one point of entry to access your portfolio and arrange transactions.
- Reduced administration and paperwork: consolidated income and capital gains tax statements from one source to help simplify tax returns; reporting, transactions and monitoring from one secure online platform.
- Lower investment costs: the avoidance of marketing and sales costs for the fund management groups and the purchasing power of the service results in favourable discounts on initial and annual management charges.
- Reviews: easy, regular reviews to reduce risk and increase returns.
Using Lifestyle Financial Planning to help after a divorce
One of our clients, Mrs W, aged 53, recently went through a divorce and received a settlement of £225,000. Her solicitor recommended the services of Yates & Co. Having given up her career to look after their two children (now at university) Mrs W had never dealt with the long term finances, although she had been used to budgeting monthly. Mrs W also had some pension funds but was worried about her financial future and whether she would be able to afford the rest of her life. She really needed some peace of mind.
How did we help?
Simon offered Mrs W an initial meeting, at our cost and with no obligation. At that meeting we explained our Lifestyle Financial Planning service and the fact that one of its key benefits is to ensure that people can live the lives they want without worrying that their money will run out. Mrs W became a client and, despite being in a state of shock after a difficult divorce, we worked closely with her over a three month period. We helped her to work out what she wants to do with the rest of her life and how much it will cost. This life time cash flow forecast formed the foundation, on which we built her Financial Plan. This gave Mrs W a clear picture of her financial future, which gave her peace of mind and the confidence to look forward to it. She left our offices with a bigger smile on her face each time.
We have set up a schedule to meet with Mrs W once a year to review and amend her Financial Plan with her, to ensure that it evolves in line with her circumstances and changing economic conditions.
Equity Release Is Not For Everyone... Is It Right For You?
Downsizing or using savings may be a better option and you may be entitled to state benefits.
Recently, we arranged an equity release for a client who wished to buy a house. Many people think that equity release is only to raise funds on their present property. The client had a good deposit from the sale of his present house but the house prices were so expensive in the area that he wanted to live, near to his daughter, that an equity release mortgage was needed to provide the difference. The result was that the client could buy the house and live in it for as long as he wished as the equity release provided a guarantee of no negative equity.
Our equity release service offers you a free initial meeting where we discuss your circumstances and requirements with you to see if equity release is likely to be suitable. Schemes are available to provide monthly income and/or a lump sum. We explain other options to help you to consider everything and in particular we recommend involving your family.
If we agree that equity release is suitable then we will research the schemes and provide you with our independent advice. The market is dominated by the big providers with direct sales teams but our message is that our independent advice with face to face meetings (at your home or our offices) can give you the confidence to know that you are making the right choice relevant to your own personal circumstances.
Our clients tell us that equity release has given them financial freedom to enjoy their retirement and we have arranged equity release for a wide range of reasons.
Using Equity Release to purchase a property
One of our clients is a retired, widowed mining engineer, aged 74 and with no dependants. He lived in a mortgage-free house, valued at £120,000 but ill health was making visits upstairs to the bathroom very difficult for him.
How did we help?
He sold his house for £120,000 and purchased a bungalow for £155,000. We then arranged Equity Release for the difference of £35,000. The client has no monthly interest to pay as it rolls up and the guarantee of no negative equity means that he can stay in the bungalow to the end of his days (irrespective of how much the mortgage balance increases to).
Our Lifestyle Financial Planning service
Mr G and Miss V were referred to us by their solicitor, who had been impressed on previous occasions by the excellent feedback from other clients. Miss V attended an initial meeting at our offices. She told us that their overriding objective was “to achieve financial security and a pleasing lifestyle with an informed understanding of the financial implications of double redundancy in 2006, relocation from London, tripling of the cost of leasehold extension on London property and the impact of the credit crunch on assets.
As is often the case, Mr G and Miss V had previously had independent financial advice but it had focused on financial products rather than their lives. They needed a service that could help them to get past the “noise” of financial products and make choices suited to them.
How did we help?
Simon was convinced that Yates & Co’s Lifestyle Financial Planning service would help them to find the answers they needed. He arranged a LifeplanningTM meeting with both clients to help them to clarify what they wanted to do with the rest of their lives. He also used a specialised risk assessment system to ensure that any advice would match their attitudes to risk. This meeting created a foundation on which to build.
The second part of the service introduced Financial Planning. This enabled Simon to put a cost on the lifestyles that Mr G and Miss V had designed. We helped them to identify their current assets, likely income and likely expenditure during their lifetimes. This created a dramatic picture, spelling out the reality of their financial future (much better than they had originally anticipated). Based on this picture, Simon was able to give unbiased financial advice, tailored to Mr G and Miss V’s lifestyles and unique cash flow forecast.
Using Lifestyle Financial Planning to retire earlier
One of our clients was referred to us in 2007 by a firm of accountants, initially to discuss buy to let mortgages. They soon realised however that what they really needed was our comprehensive Lifestyle Financial Planning service.
The couple both worked in the NHS and have a household income of about £85,000, with savings and investments of approximately £180,000. With three children, they were concerned about university fees, amongst other things.
When we first met them, they were aged 46 and thought that they could retire at 65, but would like to stop work earlier or at least have more choice.
How did we help?
We guided them through our Lifeplanning process to establish what they wanted to do with the rest of their lives and then helped them to cost out that lifestyle, looking at intended expenditure and projected income from all sources. We put together a lifelong cash flow forecast that showed what their financial future looked like and proved that they could retire at 55 - 10 years sooner than they thought - and still live the lives they wanted.
They also took out further insurance cover on our advice, as we had demonstrated the effects of death or illness on their financial future and accurately calculated the amount of cover required.
New tax-efficient investments were also found for them - based on the rate of return they needed to achieve the lives they wanted, without taking unnecessary investment risk.
Investment Planning to suit specific requirements
Another of our clients is a 75 year old widow who received a lump sum from her late husband's estate. On recommendation of her local bank, she took out an equity-based investment but since taking it out, it had decreased in value by over 40%.
How did we help?
By undertaking a detailed 'Fact Find' of her desire and expectations for her investment, it became clear that the original advice was not suitable. We are therefore now corresponding with the bank to obtain copies of the documentation leading up to the advice so that we can obtain restitution for our client and at least take her back to the position she would have been in if the money had not been placed in equity-based investments.
Once we are aware of the amounts involved, we will advise her based on her specific requirements and her attitude to risk. By not being limited to one provider's products and services, we can structure a solution that fits her requirements exactly.