Investment Plans

We were introduced to a couple by an accountant because they were becoming very frustrated with the amount of paperwork they were receiving from their investments and had no idea when they could or should retire, having just sold their business. The couple had cash of £1m as the net proceeds from the sale of their business and having bought a retirement home outright. They needed an income of £40k per annum and from a property and other sources already had £28k gross.

Over the years the couple had used their tax efficient allowances with many different product providers and had accumulated different structures including pensions. In addition they had not received any ongoing advice with the investments and did not have a clear investment strategy; they had purchased the investments and not reviewed them since.

The first step was to listen to exactly what it was that was frustrating them and following that initial consultation we thought it would be prudent to complete a full holistic review. As a result of doing a thorough fact find we unearthed some valuable guaranteed annuity products in their pension portfolio that were providing annuities ranging from 11% – 14%.

Once we understood exactly what they had and what they wanted, we completed an OCM strategy Projection and discussed the amount of risk they are comfortable with in line with investing using our innovative investment strategy of Outcome Based investing. The resultant Outcome of 6% was then used in conjunction with an “OCM Asset Structure Illustration” showing what Financial Solutions they should implement, what should be consolidated, where it should be placed, and then why from an income,  tax and strategic point of view.

Having discussed this in full with the client they agreed and we then completed a report detailing our recommendation and what and presented that to the client. Following those discussions the client duly implemented all our recommendations which included:-

  1. Cash was consolidated and National Savings used where applicable
  2. ISA’s were consolidated
  3. Estates were equalised to maximise tax planning opportunities
  4. A CGT portfolio was created to use this allowance annually
  5. Pensions were annuitised if guaranteed annuities applied, and timing deemed optimal
  6. Other pensions were consolidated into a SIPP and retained, left closed to maximise IHT strategy to age 75
  7. IHT planning was thoroughly reviewed, gifts made, trusts used and insurances set up

We also referred the clients to a Solicitor who set up new Wills, LPA’s and Spousal Bypass Trusts for the pension pots so they did not come into the estate on first death, whilst they remained unopened.

All in the client benefitted from a through financial review, strategy and clearly defined path from where they were to where they were going and felt relaxed and in control. The result was they were happy that they could actually retire and minimise the tax and charges drag on their assets and all strategies were discussed and reviewed.

As a result the clients have now simplified their affairs and benefit from having a quarterly review to make sure the strategy and our objectives are aligned.

The above case study is for information and illustration only. It is not intended to be individual advice and it should not be taken as such. If you have any questions relating to your own circumstances, please contact us.