At different points in life people may come into a large lump sum. The circumstances can vary a lot. It could be an inheritance – one that was possibly anticipated, though sometimes not. It could be through the sale of a business, or perhaps downsizing the family home and ending up with a large cash sum. It could be a redundancy. It could even be a lottery win. In the clients we see the amount can range from the mid-high five figures up into the seven figures.
When someone comes to us in these circumstances, we’ll start off with what you might call a ‘discovery meeting’. Pre-Covid this would typically have been face-to-face. Currently we’ll do it on the phone or via Zoom or something similar. At this early stage we’re looking to understand the client – their circumstances, their expectations and objectives.
We also need to consider their tax situation, current earnings, future likely earnings and so forth. We want to know what their aspirations are and also their attitude to risk in terms of investing. Call it a ‘fact-finding mission’. We don’t charge for this consultation. At that first meeting we don’t know whether we can help the client or even whether we’re a good fit together.
We’ll offer the potential client some thoughts about different options on where and how they might invest that lump sum.
- Do they just want to save it?
- How accessible should it be?
- When might they be looking to draw from it?
- Do they want an income from it?
- If they’re working how will that income affect their tax situation?
- Invest it on or offshore?
We might suggest diversifying the investment of that lump sum across several insurance companies. We’ll want to get as full an idea as possible about what the client’s needs and expectations are. Part of this process of course includes looking at their current financial position.
If we think we can help and the potential client is keen to proceed we’ll have a second, structured, meeting. At that meeting we’ll go into more detail. We’ll have some specific proposals to put to the client – based on what we’ve drawn out of the first meeting in terms of their objectives. We’ll talk through the different ISA options available. We’ll talk about which companies or funds are performing well. We’ll discuss attitude to risk. And we’ll outline very clearly what the charges and fees are.
Charges are what the client pays to the companies they’re investing with for management and administration. Fees are what clients pay us for our advice. Everything is very clearly laid-out at the meeting and in subsequent documentation.
We’re independent financial advisers. We’re not salespeople and we don’t put any pressure on our clients to go with one policy or pension over another. There are two key words in the description of what we do – independent and advice. Our reputation and business is built on referrals so we never lose sight of our core purpose: offering independent financial advice.
Risk Warning.
The information contained in this article is provided in good faith and is provided for information purposes only.
Whilst every care has been taken in the preparation of the information, no responsibility is accepted for any errors which, despite our precautions, it may contain.
No individual investment advice is given, nor intended to be given, in this article and no liability will be accepted in respect of any action you may take as a result of reading this material.
If you are unsure whether any particular investment or any specific course of action may be suitable for you, you are urged to take independent investment advice.
