Long term relationships really are the backbone to successful financial planning. Very often this crosses generations as advisers seek to ensure financial goals are met and wealth can transition efficiently from one generation to the next.
Money Matters spoke to Jenny and her son, Julian, about their decade-long relationship with Clive Barwell, Wren Sterling’s Head of Later Life Advice.
Money Matters: First of all, could you quickly recap on how you came to work with the family, Clive?
Clive Barwell: I first met Rod (Jenny’s late husband) after an introduction from a solicitor when Rod’s mother was ill back in 2005. I was called in to do some urgent inheritance tax work (IHT) because there were no arrangements in place and a potentially sizeable IHT bill emerging.
At the time, it was also 5-6 years away from when Rod expected to retire and he wanted to get a steer on what he was going to have and in anticipation of receiving an inheritance from his mother, who was nearing the end of her life.
He was planning to gift some money to the children as my analysis showed that Rod and Jenny were going to be secure in the long term. There was a clear opportunity to cascade the money down the generations.
Sadly after we had made plans, Rod died quite unexpectedly. This meant there were two inheritances coming into the family at that time, so the planning for Jenny his wife, and her two children Julian and Alex began to take shape as the issues emerged.
MM: Jenny, this was obviously a very difficult time for you and the family – did you understand the issues?
Jenny: I must admit I didn’t know much about it. Previously I had left finances to Rod so I had very little understanding. All I knew was that we had always provided for the children, Rod had a pension due to his work and we had some savings.
MM: Jenny and Julian, you’ve both been clients of Clive and Wren Sterling (formerly Towergate Financial) for over ten years, how would you say the relationship has evolved?
Jenny: I would say it has become a lot more relaxed. I feel comfortable talking to Clive about our finances and my understanding has certainly improved.
Julian: I first met Clive in London when I returned from studying in America. I went to see Clive because I was going to receive an inheritance. Clive had worked with my father for many years and was involved in the family’s finances, and now I had an individual relationship with him as I discussed my personal financial plans for the first time. This was a real benefit. I was thinking about these issues much earlier, in my mid to late twenties, than I would have done otherwise.
MM: Jenny, what are your financial priorities in the next few years?
I now look ahead in two to three year cycles – housing and care and things like that are on my mind now. I might need to move out of London for that, but for the moment I’m lucky enough to be able to stay where I am.
My advice to anyone else facing a situation like mine would be not to make any rushed decisions.
MM: Has your planning had any effect on your lifestyle?
Jenny: I have no complaints about my lifestyle. Travelling keeps me going and I’m fortunate to have been able to do quite a lot of that in recent years.
CB: We spoke about this early on and Jenny realised that there might be a time in the future when this might not be possible so we’re looking to make sure she can do what she wants to do without compromising her long-term provisions.
MM: So what about you Julian?
Julian: Well, I now have full-time employment after a long time studying and living abroad. I’m still renting, so what’s prime in my mind is to stop renting and buy a property, which isn’t easy in London. Thanks to the inheritance that Clive invested, at some point in the next couple of years I’ll be using that as a deposit on a house or apartment.
MM: We can see how the relationship has evolved in the sense that there are changing issues for you all to deal with as you go through life, but how do you feel the involvement of an adviser has altered your dynamic as a family? Is it easier to talk about money?
Julian: I think it’s easier. When I was young I never spoke to my dad about finances, then with Clive’s help I was able to understand more about why it made sense to move the money to me at that stage. What really helped was the fact that we already knew Clive. It wasn’t a new relationship and we didn’t need to trust a stranger with the family’s finances at a difficult time.
Jenny: I agree, it’s been very reassuring to have Clive on hand.
It’s also reassuring for me to know that my children have organised their finances independently of me, so I don’t need to take on the burden of understanding new issues or feel like I need to advise them.
MM: Of course, people have different objectives at different stages of their lives. We talk a lot in Wren Sterling about people reaching their long-term goals, but in your experience Clive, do people really look long-term?
CB: Generally speaking, a lot of people don’t make long term plans, or even look beyond the end of the month. In my experience it usually needs the catalyst of somebody like me to come in to crystallise thinking.
MM: Did you think financial advise was going to be expensive?
Jenny: I didn’t really think about it that way. It’s a professional service – like calling a plumber out. You could fix it yourself, but you know what’s going to happen! We live in a great DIY world, but I think there’s a lot at stake here. Without Clive’s help we may have lost a lot in IHT in the last 10 years.
Julian: People of my generation don’t necessarily look at retirement because you can’t picture yourself being that old, so they may see it as expensive. I’ve really benefited from the professional advice though and feel like I have greater understanding of the issues that have affected our family and I know what I’m doing financially over the next few years.
CB: That’s really the benefit of an experienced financial adviser. Having a concept of what it looks like at the end of the journey can make it easier to map out the steps to get there.