I have been fortunate enough to work with a number of clients over the years and continue to advise many of them today. I have enjoyed seeing my clients grow their families, build up their careers and even set up their own businesses.
There are many examples of past advice scenarios that stick in my mind; like the time tailored pension advice to a large firm resulted in them saving over £60,000 in Corporation Tax; another client required help with their family business and needed advice on the purchase of their own business premises by using a pension; and the couple who we provided advice to in relation to their estate planning and by careful use of investments and a trust arrangement, saved over £150,000 in Inheritance Tax for their loved ones.
These examples are personally satisfying, but this doesn’t mean that the role of an Independent Financial Adviser is simply to advise those who are wealthy. Professional relationships, just like personal ones, are built over time as we travel through the various stages of life and business cycles.
As rewarding as these examples were, I believe that the most important piece of advice I have ever provided was to a young gentleman in his mid 20’s.
He had recently married, had a toddler and another baby was on the way. After a lot of soul searching he had decided that the time was right for him to set up his own business and capitalise on an opportunity. He had an outstanding mortgage of around £100,000 on the family home, which at the time was worth around £150,000. Being young with a young family he did not have much in the way of savings and as the sole breadwinner and becoming his own boss he realised that setting up his new business was costly.
Initially, he thought that setting up a pension would be a priority, to allow his savings plenty of time to build up, but we agreed that protecting the mortgage was a must. We set up a life and critical illness policy to repay the outstanding mortgage loan in the event of death or serious illness and this provided the peace of mind that the family home would be retained and the outstanding debt repaid should the worst happen.
We went on to discuss a further protection policy, but this time linked to his new business venture. He was the key person within the business and if something unfortunate was to happen to him then there would be no business left, or any income from that business with which to support his young family. Again, we decided on a policy which provided life cover and critical illness insurance over an 18 year period to provide security to his family while his children grow up.
Unfortunately, he was diagnosed with a severe illness which met one of the definitions of a critical illness just four years and three months after we set the policies up. He was aged just 29, physically fit and still very active.
I am pleased to say that two years on, he is now fully recovered and he and his wife have two healthy children and thanks to the protection policies, they live mortgage free in their family home. He also runs a successful business which now employs three members of staff and thanks to the proceeds of the second policy he has been able to protect the firm’s financial position.
Every family and business needs to start somewhere. We all face challenges and unexpected events, some of which can be planned for and some that can’t, but for the latter at least you can put plans in place to protect against the worse case scenario. Seeking financial advice could be a small price to pay for the security it can provide.
