A second opinion leads to a more complete financial plan

A recently retired police officer was referred to me by the payroll manager of an accountancy practice we have a close relationship with. He had been subjected to a pitch from an advisor trying to persuade him to invest the tax-free lump sum he received from his pension, which was about £200,000.

The retired officer knew he needed to do something with this money, but did not know quite what it should be or how to do it. An average return of 10 to 15% per annum was indicated by the other advisor, and this suggested he should take action because interest rates were low.

Believing he should get a second opinion, he reached out to a family friend, the payroll manager of the accountancy practice, in the hope that they would know who to speak to. But he also admitted that if they were unable to help, he’d end up going to the advisor he’d been pitched by.

We met virtually, and he was initially surprised that we insisted on his spouse being present. He was also surprised when we asked him to complete a pre-meeting questionnaire and have his financial documents on hand for the meeting to take place. Surely this was just about comparing one sales pitch to another.

During the meeting, we completed a financial roadmap to understand the couple’s values and goals. We then benchmarked their current financial position, and only after that made an offer to build a financial plan for them.

There was no discussion around tax wrappers or investment returns, our fees were clearly and simply explained, and the clients had greater clarity over their future and what they needed to do to get their financial house into perfect working order.

They did come back with a couple of questions, one of which was why we hadn’t made the investment returns an essential part of our meeting. They also wanted a greater understanding of how the cash flow forecast would work. Could we really create a lifetime financial plan to take into account everything they told us was important to them?

After a further conversation to reinforce how risks and return are intrinsically linked, and how the margin you might look to make above inflation over the longer term is key to everything, they were completely committed to us becoming their trusted financial planners. The meeting was conducted with honesty, authenticity and integrity; they understood I wanted the best for them from my heart.

The awesome thing is that the payroll manager already knew what experience the friends were about to get because they’d already experienced this for themselves and had made many other referrals to me. The accountancy firm has a level-10 confidence in everything we do and why we do it, and have become our greatest advocates. It’s the ripple effect: When you help someone, you don’t just help them, you help others they come into contact with as well.

Edward Marshall is a three-year MDRT member from Shrewsbury, England. Contact him at em@kingsland-ifa.co.uk.