Case study – professional connections

This client was referred on to us by their Accountant. They had been receiving advice for a number of years from another Independent Financial Adviser but had become disillusioned by the charging structure and the overall performance of their invested funds. They had subsequently had little contact with the Adviser for some time and were seeking an alternative opinion.

We were asked to review their existing portfolio of investments to assess the performance, charging structure and suitability of the portfolio in terms of their agreed risk profile and investment time horizon.

Our approach and findings
We met with the client to fully understand their current situation, their concerns regarding their existing Adviser and their hopes and expectations for any dealings with ourselves.

We researched and reviewed the investments held and assessed their asset mix, performance against their benchmarks, risk profile and charging structure.

Our investigations into the existing plans revealed a number of concerning points, not least of which was an investment within their Pension into an Unregulated Collective Investment Scheme which appeared wholly inappropriate given the client’s risk appetite and investment experience. The overall portfolio did not meet the client’s current risk profile.

As part of the wider review we also looked at the client’s protection needs, the suitability of any existing protection plans held and the implication of inheritance tax on their estate. As our client was the primary earner in the family, and was co-habiting with their partner, their death or incapacity would have a serious impact on the family’s ability to cope financially.

We identified that an existing life protection policy had been set up in an inflexible Trust for the benefit of one child alone without consideration for future family growth and no opportunity to alter the beneficiaries at a later date, despite this being a stated aim at the original meetings.

As the client’s specific aim was long term pension planning, rather than shorter term savings and investments, we calculated their pension contributions in recent years to confirm any carry forward available. We were then able to redirect their existing ISA and collective funds into the more appropriate pension vehicle.

We utilised our review findings and research facilities to create an investment strategy to match our client’s risk appetite and stated investment term. They now have investment plans which are truly in line with their needs. Their invested funds are well diversified but have been simplified for ease of administration.

The charging structure of the revised plans will reduce the on-going charges by more than half, so leaving more funds available for investment growth.

We have assisted the client in lodging a complaint with their previous Adviser regarding the inappropriate use of an Unregulated Collective Investment Scheme within their Pension portfolio to determine if they are entitled to any redress or compensation.

We found protection solutions to meet both life cover and income protection needs and, where appropriate, recommended Trust arrangements which would suit the family both now and in the future should their circumstances change.

We also highlighted the importance of IHT planning and the potential liability which would currently be owing on the estate in the event of the death of the client. This area is to be addressed more fully in future reviews.