Helping clients navigate life-changing financial decisions

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Ten years ago, I met a client who was in his 30s while doing a group pension review for his employer - a large life company. His financial situation was quite ordinary – he had a mortgaged property, a pension and some modest investments. We gradually built upon this with him, which meant investing more money, reviewing his insurances, topping up his pension, using his allowances and maximising his ISAs. Nothing too out of the ordinary.

Then this client became very ill; this meant he was in chronic pain on a daily basis. As such, both he and his wife had to stop working as he needed full-time care. Unfortunately, the client’s career had, in effect, ended less than halfway through. This sudden change in lifestyle meant that the family of four had a much smaller income than before.

My client was able to claim from his critical illness insurance policy when he became ill and to negotiate an exit from his employer, allowing them to pay off their mortgage and invest what was left. They were then able to receive some state benefits and support from friends. This meant they could afford to leave the bulk of their investments to grow. However, they were very concerned about their long-term finances and found it very hard to see how they would manage in the future, putting extra pressure into an already difficult family situation.

I modelled their future position using cashflow planning via the Voyant system, a tool we use to help clients forecast their future and to see various ‘what if’ scenarios. After running many different scenarios, we found that even the likely worst-case scenario in terms of a market crash they could still achieve their lifestyle goals which were to go on holidays and get out and do things now since the client’s pain has become more manageable. At present, they are topping up their income from their investment portfolio.

We know from the modelling that they will be able to live a relatively comfortable lifestyle in retirement. As a result, they will not have to sell their house, as they had thought, unless they want to. It has taken several years of meetings, calls and emails to reach the point where they now have the confidence to spend a bit more on themselves and relax about their finances. I am sure this has made a difference to the client’s health and the whole family’s wellbeing.

The main thing I find with my clients is that they want reassurance that they will be financially secure in the future. Creating various scenarios allows me to go into meetings with hard evidence that the client’s long-term financial goals are achievable. This means we can set people up to overcome adversity and reassure them that things will be okay, even if something goes wrong.

The Financial Conduct Authority does not regulate cash flow planning.

Neil Sadler – Latest Blog Posts

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