How I support clients going through divorce

Over recent years I have worked with a number of clients who have had the unfortunate experience of going through a divorce. Generally, those clients tend to be women, who now need to find a way forward and plan for their future.

It is imperative that anyone going through divorce receives professional advice in addition to their solicitor to ensure their financial settlement is not only fair and just, but following that settlement, appropriate plans are put in place to secure their financial future.

In my experience, women who have been the home maker have sacrificed their careers to bring up the family which has had a knock on effect on their own personal finances. I’m sure that will change as the impact of greater equality in work filters through in the next generation.

What’s in a settlement?

Prior to the settlement being reached, I sometimes help my clients to calculate what is at stake in a settlement and this helps them to engage with the process.

However, often, I’m only brought in after a settlement has been awarded. At this stage my clients have become overwhelmed with the process and more importantly are not aware of what the financial settlement is comprised of and what they need to do. If possible, I always try to start work before this point.

A financial settlement can consist of lots of different parts including property, cash, investments, shares, pensions, alimony to name but a few so careful planning and consideration is required. This can be a very daunting task and also very complicated and confusing. Depending on the age and employment prospects of a client, it could be their last chance to secure a financial settlement for the rest of their life, so it’s critical.

I work with my clients to provide assistance and information in a simple, straightforward and jargon-free way to help them understand what each element means in terms of their financial settlement.

I take my time to ensure they are fully aware of what it is they are receiving, and more importantly the immediate and future impact it can have on them. This can also be done in meetings that include their solicitor or a member of their close friends and family to ensure they are not overwhelmed or confused by the process.

Then a full holistic financial plan is put in place to ensure that during this difficult time, the correct decisions are made to ensure the financial settlement allows them to be financially secure, not just now but throughout their lives and throughout retirement as well.

Ongoing support

This piece of work is not just a one-off piece of advice. Generally, people are looking to ensure that their plan meets their ongoing needs but is adaptable should things change for them personally, and through legislative changes.

In a recent case, I helped in the following areas:

  • Explaining that a financial settlement doesn’t just mean a 50/50 split of everything.
  • Explaining what a Pension Sharing Order meant
  • Discussed investment options and how pensions work to find a suitable pension for this order.
  • Being awarded rental properties, we discussed about how using a management agent can help in managing those properties, the taxation treatment of the rent received and how self-assessments would now be required.
  • Due to cash settlement, we discussed her requirements for this money but also the impact of inflation and FSCS Limits.
  • Updating of her Will as well as beneficiaries for the personal policies.
  • Full understanding of her plans both now and in the future to ensure she had the right level of income now and in the future, including retirement to ease the stress of financial insecurity for her and her children.
  • We also put plans in place to ensure she was as tax efficient as possible.

All of the above ensured that my client felt at ease through this process and more importantly that there was light at the end of the tunnel and she doesn’t have to stress over her finances.

As a financial planner, this can be very rewarding work because someone in such a vulnerable position with a lot to lose and gain really benefits from my advice. I always feel that I have made a difference when I hear “you have made this much easier for me” or “I am so glad to have had you in my team” or “I have dreaded this whole process but you have made it simple and straightforward for me.”

Can we help?

Do you know anyone who is going through divorce who could benefit from speaking to your financial planner? We’re happy to have an informal chat with them to help answer their questions. Please speak to your financial planner.

The Financial Conduct Authority does not regulate Will writing or tax planning. This article is for information only and does not constitute financial or legal advice.

Terry Ratcliffe
About the Author

Terry has spent the last 7 years working in the financial services industry and has built a wealth of knowledge and experience. He started at a Wealth Management company before joining Mutual Financial Management in 2019 which was acquired by Wren Sterling in 2022. Terry specialises in holistic financial planning including pensions, investments, protection, tax planning, employee benefits and intergenerational planning for a diverse range of both personal clients and business owners. Outside of work, Terry enjoys spending time with his family and friends, walking his dog, refereeing football and going to the cinema and theatre.