What potential clients often think we do versus what we actually do

Introduction

When we meet potential clients for the first time, we often find their questions initially tend to focus on something product-related, for example:

"I just received a letter from my pension provider, and my 60th birthday is coming up; what should I do with it?"

What we at Pyrford Financial Planning actually do

As potential clients become clients and begin the journey through our retirement planning process, they start to see that we offer far more. Below are some examples of the areas where we add value for our clients unrelated to how we might invest their money.

1. Establish and prioritise objectives

During our iterative financial planning process, we establish objectives and how much they will likely cost. Some examples include:

• Recurring spending: Core retirement lifestyle of £40,000 per annum in early retirement.

• Gifting: Gift house deposits to children: 2x£50,000

• Big ticket items: Round the world cruise to celebrate retirement: £30,000.

The vast majority of those planning for retirement (alas!) do not have unlimited funds for retirement, so we sometimes find ourselves iterating through the financial planning process until we have achieved the best blend of outcomes given finite resources. However, it's actually more common for clients to have an expected surplus of funds after the first financial planning iteration, and for these situations, we encourage them to revisit their objectives. Might they want to spend more on holidays, especially in early retirement? What would the children be able to do if you gifted them more money?

2. Provide peace of mind and confidence to spend money in retirement without fear of running out

Retirement planning is often a complex challenge. Our tried and tested process helps our clients have the confidence to spend their money in retirement, even during periodic market volatility. We stress test client spending plans against the worst-case outcomes over the last century, including the inflationary 1970s and the two Great Wars. We revisit these scenarios with our clients during our periodic "lifeboat drills", where we discuss how they might react if the market fell for a prolonged period of time.

The graph from Timeline below (one of our software partners) shows how prolonged these market falls can be (the 1970s in particular).

UK bear markets and how long they took to recover

3. Encourage clients to spend their money.

It can often be challenging for people to come to terms with the fact that their monthly paycheck has stopped, and they will now have to rely on their savings, pensions, and investments, which they have diligently accumulated, to support their retirement lifestyle. Once a robust retirement plan is in place, our job is to encourage our clients to spend their money and enjoy retirement.

Some clients may feel comfortable spending only the gains in their portfolio, but we help them understand that occasional market turbulence is to be expected and pre-agreed spending plans are unlikely to be impacted.

4. Encourage clients to gift

Clients are often reluctant to gift to children as they fear they may leave themselves short, preferring to leave the children something if there is a surplus when they die. The issue is that the client may well live into their nineties, and their children are then into middle age and may not have a pressing need for money at that stage in life. We are often called upon to help the parents of our new clients undertake inheritance tax planning and wonder if they had planned (and gifted) earlier in life whether this may have been a better outcome.

5. Give clients the confidence to finish work, knowing that they have enough

A common theme for clients when they first engage with us is for them to be desperate to finish work but not know if this is financially viable. After being taken through our retirement planning process, they can finish work with confidence, knowing they are going to be OK.

6. A safe pair of hands if a spouse dies

We sometimes have a potential client contact us because they are (understandably) worried that their spouse would not know what to do if they were run over and wanted a trusted pair of hands to guide the spouse if the worst were to happen. We build a relationship with both parties, giving peace of mind to both.

7. Helping clients as they get older

It's a sad fact of life that financial literacy tends to decline as we age, potentially increasing the chances of making financial mistakes. A trusted partner helps to minimise that risk.

Declining financial literacy as we age

8. Acting as an independent sounding board

We offer independent and impartial financial advice and can act as a sounding board when you are making emotionally driven financial decisions.

9. Help prevent clients from blowing up their retirement plans

The News (Negative Events World Service) is often full of doom and gloom. It's very easy for this negativity to encourage us to do something to prepare for impending doom - for example: "sell all investments and sit in cash until the storm is over". Unfortunately, history has shown us that the best option is to do nothing, and this is sometimes all our clients need to hear, giving them the confidence to stick to the plan.

10. Ensure lifetime taxation remains optimised

Taxation legislation is continually changing. ​We will keep you updated and ensure your financial plan is tax-efficient. Our goal is to optimise your lifetime taxation, thereby helping to give client retirement plans a greater chance of success.

11. Educate clients

We love sharing our knowledge with clients, believing that a better-educated client improves their chances of retirement success. We encourage clients to ask questions; some of our responses are below.

• Michael Burry was reported to be predicting that the market was going to fall. Our client wondered if we should adjust their portfolio.

• A client wondered why we rebalanced our portfolios and bought bonds that had been underperforming shares in recent years.

• Similar to the bond question, another client asked why we should hold certain equities that hadn't performed as well as others over the last few years.

• Several clients questioned whether recent portfolio performance might impact their retirement plans.

12. Retirement income planning and optimisation

Retirement income planning is a detailed topic, and we have discussions with clients such as:

• Would you prefer your retirement income to resemble a steady paycheque or have a higher starting withdrawal rate and accept some potential adjustments to your income if there is some stock market volatility?

• Would you like to front-load your retirement spending while you are likely in better health?

13. Helping clients implement our advice

Many of our clients lead busy lives and appreciate our support in ensuring that agreed upon action points are implemented (which can be as simple as setting up Lasting Powers of Attorney).

Want to find out more?

If you want to learn more about our retirement planning process, please schedule a free, no-obligation call.

About us

The team at Pyrford Financial Planning are highly qualified Independent Financial Advisers based in Weybridge, Surrey. We specialise in retirement planning and provide financial advice on pensions, investments, and inheritance tax.

Our office telephone number is 01932 645150.

Our office address is No 5, The Heights, Weybridge KT13 0NY.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Although best efforts are made to ensure all information is accurate, you should not rely on this blog for your personal situation or planning.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.