Introduction
Our client is a board level executive in an international financial services company. Having maximised his pension savings by the time he reached his early 50’s, he wanted to ensure that these and his other assets were invested to allow him to achieve his financial objectives, continue his future savings and grow his broad portfolio of investments.
The Challenge
Our client approached Acuvest with a view to preparing a long-term plan that was aligned with his objectives, efficient and good value. He wanted the planning completed jointly with his wife, so they would both be fully informed and involved in all aspects of their personal finances.
He wanted clarity about how much would be required to fund retirement for him and his wife, and how to invest his pension fund in the context of the maximum funding limits. He also wanted to assess whether there was capacity to give their 3 children (still in education) a helping hand, and he wanted to start exploring estate planning in a tax efficient manner.
He wanted advice from Acuvest on developing and executing an investment strategy to incorporate pension savings, property investments, shares in a growing private business and other shares, listed investments and cash savings. This had to account for uncertainty of the value of some assets – shares in a private business with potential for, but no guarantee of, significant growth.
Our Solution
The Acuvest financial planning process provided context and an engaging environment for good collaboration and fleshing out of financial objectives for the couple in relation to their family.
We then simplified our client’s investment strategy, with “buckets” earmarked to meet different objectives. As part of this, we recommended restructuring his portfolio, with his pension assets invested primarily in low-risk investments, as growth in-excess of the Standard Fund Threshold would simply attract penal tax rates.
We developed an appropriate growth path for the non-pension investments, taking account of the low-risk strategy being adopted for his pension assets, while we earmarked our client’s investment property as a source of deposits for houses for their children – this being the best hedge against future house price inflation. We ensured that his assets as a whole were allocated to meet the defined financial objectives. A trading platform was set up for our client to ensure that he could access the required asset classes in the most cost-effective manner.
We also engaged a tax adviser from our professional network to assess the implications of transferring some assets into trusts for their minor children, within a family partnership structure.
The Results
One of the most important observations at the outset was the different ideas / initial objectives of our client and his wife in relation to financial independence and supporting the children. By the end of the financial planning process, both were completely aligned, feeling empowered and in control of their financial future. They also have a clear understanding of where they are along the path to their objectives.
A subsequent partial exit from the private company shares has led to the development of investment plans for each of the Trusts for the children within the family partnership, as these each have different investment objectives and time horizons.
They have ensured the transfer of assets at low initial value that subsequently realised strong gains, thus avoiding a potential double hit of Capital Gains Tax and Capital Acquisitions Tax.
Our clients are confident that their investments are fit for purpose within the overall plan, with appropriate asset allocations for their different investment timeframes and objectives. They are also satisfied that their reduced investment costs, residual fees and charges represent excellent value for money.
We meet our clients quarterly, following a very structured process. These meetings ensure that any changes in their objectives are noted, planned for and ultimately achieved. The meetings also ensure that the investment strategy is reviewed and altered as needed.
Everything didn’t get done at once at the outset, but by putting tasks on a list to be addressed over time, our clients achieved a lot over a short, but manageable timeframe. This gives them confidence about their financial future and allows them to focus on living life to the full.
