Broadstone News & Events

Why might now be an ideal time to take advice?

The effect of coronavirus has been devastating and has had an enormous impact on our mental and physical well-being. But what about the impact on financial health?

Knowing that your finances are in good shape is vital for your peace of mind and obtaining the right financial advice to help you achieve that is now more important than ever.

Here we look at some examples to show how the Personal Financial Planning team at Broadstone can help to ensure that your financial plans don’t go awry in these unprecedented times.

Click one of the links below to read the case study
Anne’s case study
George’s case study
Richard case study
Julian’s case study
Tim’s case study
Roger’s case study

Anne’s case study – cash flow modelling retirement income. Age 64, retired, and worried her pension may not last

When markets fell due to the coronavirus pandemic, Ann’s pension inevitably suffered some losses. She wondered if she would be wise taking less income from the pension to give it time to recover but was concerned about how this would affect her lifestyle. She sought advice from the PFP team at Broadstone.

How did Broadstone’s Personal Financial Planning Team help?

Using Broadstone’s cash flow modelling analysis, Ann and her adviser calculated exactly how much income she comfortably needed for bills etc. and general living costs. They also worked out how much income she might need in later life when her needs could change.

Our PFP team produced a visual projection showing the impact of drawing less income, on the value of her pension fund, compared to the current level of withdrawals. The figures were calculated taking into account Ann’s changing expenditure, and the extra money she would receive from the State Pension in a couple of years. Ann’s adviser produced a detailed report using graphs to show how the value of her pension would likely change over the years to use as a ‘financial planning roadmap’ for the future.

As a result of the consultation, Ann now has a clear idea of the level of income she actually needs and the amount which she can realistically withdraw from the pension without depleting its value too soon. Ann had been very worried that her pension could run out of money but the cash flow analysis demonstrated how this risk could be avoided.

Was there a fee?

Yes, Broadstone’s fee for the work involved was quoted to Ann at the outset. She chose to have the charge deducted from her pension fund direct, rather than paying the invoice from her savings.

Click one of the links below to read the case study
Anne’s case study
George’s case study
Richard case study
Julian’s case study
Tim’s case study
Roger’s case study

George’s case study – protecting his family. Age 37, married with a young family and working in a demanding but well-paid job

If the unexpected happens, George and Emma wanted to make sure their family would be financially secure and they sought advice from the Broadstone PFP team.

George has a good, but demanding job and his salary means they enjoy a nice lifestyle. They have three young children aged between 2 and 6 and Emma gave up her career to become a full-time mum.

George has life cover through his pension scheme, but Emma has none at all. If the worst were to happen to George, they weren’t sure whether Emma would be financially secure given that George is the sole breadwinner. But more worryingly, if Emma died, the children would need looking after and George knows this would mean giving up his job.

How did Broadstone’s Personal Financial Planning Team help?

The team helped George and Emma arrange the most suitable protection policy which would pay out on either George’s or Emma’s death.

George told us that he had specifically chosen to deal with Broadstone’s Personal Financial Planning team due to their ‘whole of market’ status. This meant that George’s adviser was able to search across all providers on the open market to secure the best available rates and the most suitable cover, and George felt this was a significant advantage compared to some other Financial Planning advisers who are limited to only using certain providers.

Broadstone presented their advice in a written report so that George and Emma knew exactly what was being recommended and why.

Was there a fee?

The cost of Broadstone’s advice and their work in preparing the report and setting up the policy was included in the premium and Broadstone received commission direct from the insurance company.

Click one of the links below to read the case study
Anne’s case study
George’s case study
Richard case study
Julian’s case study
Tim’s case study
Roger’s case study

Richard case study – needs assessment. Age 50, wants to check his finances are in good shape

Richard has never had a financial adviser.

He has never felt the need because he has been busy paying off his mortgage and putting his children through university. He has a good pension, and has built up some cash savings using ISAs. He has also dabbled in the stock market from time to time using an online dealing platform.

He thinks that he is managing his money fairly well, but he wouldn’t mind an expert’s opinion to see if there are any gaps that he should be addressing.

How did Broadstone’s Personal Financial Planning Team help?

The PFP team met with Richard via Skype and sent him a questionnaire to complete regarding his finances and his attitude to risk. During the meeting they discussed Richard’s plans for the future, his needs now and in retirement and explored some ‘what if’ scenarios to check the level of his financial resilience.

His adviser produced a full report for Richard, highlighting the areas under control and the areas where action was needed. For example, the exercise highlighted that Richard’s current level of pension contributions would be insufficient to sustain the lifestyle he’d dreamed about in retirement. Fortunately, as Richard’s retirement is still some years away, it will be easy to rectify.

The report also highlighted issues regarding the level of risk that Richard was taking with the stock market investments he’d bought through the online platform, and how he might make better use of his annual ISA allowance. The report also commented on his Inheritance Tax position and whether a long-term illness or death would leave him or his family financially vulnerable.

Was there a fee?

Yes, for this basic service Broadstone charged a fixed fee of £500 plus VAT. This included all consultations, analysis, cash flow modelling and all findings were explained in a written report. Whenever needs are identified and further advice is required, an additional fee is payable. This is quoted separately and agreed prior to the work being commenced.

Click one of the links below to read the case study
Anne’s case study
George’s case study
Richard case study
Julian’s case study
Tim’s case study
Roger’s case study

Julian’s case study – planning his retirement. Age 58, hoping to retire in the coming months

Julian wants to retire soon on a regular income but the recent market volatility has worried him.

He has calculated that he needs £2,000 per month to pay all his essential bills with a further £1,000 per month to pay for the nice things in life as he puts it, such as holidays, socialising and his cherished golf club membership.

He has various pensions from previous employments and wants to be certain that he has enough money coming in on a regular basis to pay the bills. He dislikes the stock market and is very risk-averse.

How did Broadstone’s Personal Financial Planning Team help?

Julian’s adviser recommended an annuity which would be sufficient to cover his bills. As Julian smokes and has diabetes, he was able to secure an enhanced lifetime annuity which gave a slightly higher rate than a normal annuity.  And due to Broadstone’s status as ‘whole of market’ his adviser was able to search quotes from providers across the whole annuity market to find the very best terms available.

His adviser was also able to advise him whether to pay for any of the ‘add-ons’ available such as inflation linking or a guaranteed period. And his recommendations were presented in a detailed report so Julian had a record of the advice given.

The consultation gave Julian peace of mind that he may retire, safe in the knowledge that his income will be paid for life, unaffected by stock market movements.

Was there a fee?

Yes, Broadstone quoted a fixed charge at the outset covering the cost of providing advice, the research, the report, setting up the annuity and paying any tax-free cash. In agreement with Julian, the fee was deducted from the pension fund before the annuity was purchased so Julian did not need to find the money from his savings.

Click one of the links below to read the case study
Anne’s case study
George’s case study
Richard case study
Julian’s case study
Tim’s case study
Roger’s case study

Tim’s case study – pension transfer. Age 55 and wants to reduce his hours and use his pension to supplement his earnings

Tim is thinking of semi-retirement in the next two years and will want to take a flexible income from his pension to top up the reduction in his salary. He has two old pension schemes from previous employments and is a member of his current employer’s pension scheme.

How did Broadstone’s Personal Financial Planning Team help?

Tim’s adviser carried out an analysis of Tim’s overall wealth, his tax position, and his objectives. He also asked Tim to complete a questionnaire in order to assess Tim’s appetite for risk. In addition, the adviser carried out some detailed research on Tim’s existing pensions to ascertain whether they matched his needs.

The adviser discovered that Tim’s pensions did not offer flexi-access drawdown and, therefore, it would be necessary to transfer the pensions to an alternative Self Invested Personal Pension plan (SIPP) which would allow Tim to draw his pension in the way he wished. The adviser recommended a suitable product and presented all his findings and his advice to Tim in a detailed report.

Once Tim had read and discussed the report with his adviser, Broadstone then arranged to implement the recommendations and proceeded with all the administration work needed to transfer the pensions to the alternative recommended.

Tim is now looking forward to the future, knowing that when he starts reducing his hours, his pension will be flexible enough to enable him to draw as little or as much as he needs to supplement his salary.

Was there a fee?

Yes, Broadstone quoted their fee prior to the commencement of any chargeable work. The fee was taken directly from the pension fund on transfer.

Click one of the links below to read the case study
Anne’s case study
George’s case study
Richard case study
Julian’s case study
Tim’s case study
Roger’s case study

Roger’s case study – the Annual Allowance. Age 51 and wants to maximise his pension contributions

Roger has inherited some money from his parents and wants to use it to boost his pension fund in readiness for retirement around the age of 60. He required advice from Broadstone as to how this might be achieved.

How did Broadstone’s Personal Financial Planning Team help?

Roger’s adviser asked for details of his pension contributions over the last three years and the level of his salary and discovered that Roger had not fully maximised his pension contributions. His adviser told Roger there was scope to make a substantial additional contribution to his pension fund using Carry Forward rules

He calculated the maximum amount which Roger could contribute and checked to see if there was any impact on his Lifetime Allowance. He then presented all the figures to Roger in a detailed report, allowing Roger to make the contribution, confident in the knowledge that he would not breach any contribution limits or trigger a penalty.

As a basic rate taxpayer, tax relief of £2,000 will be added to Roger’s pension for every £8,000 he contributes. Had Roger been a higher rate taxpayer, the tax relief would have been even greater.

Was there a fee?

Yes, Broadstone quoted a fixed fee for the Annual Allowance calculation and agreed the terms of engagement prior to commencing any chargeable work. The fee was authorised to be taken directly from the pension fund.

His adviser pointed out that taking the fee from the pension fund is actually cost-effective. For every £100 charged and taken from the pension, the cost to Roger is only £80 with the remaining £20 coming from the government in the form of tax relief.

Click one of the links below to read the case study
Anne’s case study
George’s case study
Richard case study
Julian’s case study
Tim’s case study
Roger’s case study