What is financial planning?

What is financial planning?

This blog focuses on a case study which we hope will paint a picture of what financial

Clive Barwell, Independent Financial Adviser and Head of Later Life Advice

planning is really about. In this example, I’ll illustrate how financial advisers create a bespoke, comprehensive financial plan. I’ll call this couple Arthur and Mary and we’ll talk about where they were financially when I first went to see them and where they are now.


Arthur & Mary
Arthur is 78 and had just retired from working at the local supermarket. Arthur had been married previously and has a daughter, Sandra, and grandchildren from that relationship. Mary is aged 66 and has been the home-maker. Together she and Arthur have a son, Robert, aged 42, who has mental health issues and is dependent upon them, although he is in receipt of some benefits.

Arthur and Mary have lived in the same council house since 1977, and their only real savings had come from Arthur prudently trying to put away his earnings. However, in 2007, following the recent death of her father, Mary inherited a quite substantial sum of money – in excess of £200,000.


Seeking professional advice
Arthur and Mary recognised that they needed professional advice and had a range of investments recommended to them by their bank, but didn’t really understand how their money was invested. When I was called-in – Mary had spoken to the Money Advice Service, which then recommended the Society of Later Life Advisers, leading to me as the local Accredited Adviser.

The “elephant-in-the-room” was their council house. Valued at £120,000 in 2014, Arthur and Mary qualified for the maximum discount, I realised that they could buy the property, under the Right-to-Buy scheme, for just £48,000! The previous adviser had ignored this.

This is what financial planning is all about, seeing the broader picture, and understanding what the consequences of action (or inaction) in one area are upon another. This is why I also discussed Arthur and Mary’s Will with them.


Looking at the whole picture
The solicitor had prepared Wills for Arthur and Mary based upon their instructions, but had not considered their family’s situation. Their Will would leave everything to each other on the first death and then 90% to Robert and 10% to Sandra on the second death. But this left a few unanswered questions. Could Robert manage an inheritance of some £250,000? Would such an inheritance affect his entitlement to any means-tested benefits? Does Robert have the capacity to make a Will himself to dispose of his assets on his eventual death? Would the inheritance make Robert vulnerable to “gold-digger” or fraudster?


Where are they now?

With my help Arthur and Mary have:

  • Bought their house and secured a home for Robert, as after Arthur and Mary’s deaths Robert would have had no right to continue to live there.
  • Kept a cash reserve for known and unknown contingencies.
  • Reorganised their portfolio to become simpler to understand and produce a reliable monthly income to supplement their pensions.
  • Put robust Wills in place which put their assets into a discretionary trust, of which each other, Robert, Sandra and Sandra’s children are the potential beneficiaries. In this way Arthur and Mary will be provided for, and their children and grandchildren will also benefit without Robert having to manage the money himself.
  • Set up Lasting Powers of Attorney for both Property & Financial Affairs and Health & Welfare.

Most importantly, I will now be having at least annual meetings with Arthur and Mary to ensure their needs haven’t changed and that the plan is still on course. I liken the whole process to satellite navigation in the car – I work out where someone is now, where they want to go, plot a course and then keep them on that course, avoiding the financial obstacles en route. Through regular reviews, I ensure my clients never have to ask a stranger for directions again.



Your home may be repossessed if you do not keep up repayments on your mortgage. The Financial Conduct Authority does not regulate taxation and trust advice and will writing

The content of this publication does not constitute financial advice you should seek independent financial advice regarding your own personal circumstances before embarking on any course of action.

Originally published at: https://www.clivebarwell.co.uk/what-is-financial-planning-a-case-study/

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