Director level employee personal financial planning

Sue is a Director level employee with an income that is subject to 50% tax rate.

She required a meeting with Generation Financial Services to discuss her financial arrangements, on the basis that she has accumulated a number of pension and investment arrangements throughout her working life and didn’t appreciate the level of benefits that they would provide. Sue also received a regular substantial annual bonus which she was unsure what to do with.

Sue felt that she had no clear focus or strategy to ensure that she would be financially secure when she retired.

Whilst initially, Sue’s agenda was to conduct a general review of her existing savings, investments and pension arrangements, we established that Sue’s real concern was whether she would have sufficient income in retirement to do the things she wanted.

Through careful discussion, we first established the income she felt she needed to have to give her financial freedom to do just what she wanted, but also when she wanted to achieve this by. We then looked at her existing planning arrangements, including an in-depth analysis of her policies (charges, performance, risk, values and contributions) to determine, not just her current financial position, but to see if her current planning would be sufficient to achieve her targets.

During our initial consultation, we discussed risk and reward and determined the right level of risk Sue felt comfortable with on achieving financial goals.

Once all of this information had been collated and processed, we ascertained a number of key issues that would impact Sue’s overall objective. These were presented and discussed with Sue and formed the fundamental part of her planning strategy.

Generation Financial Services determined that her current arrangements would in fact provide her with the required income, but concluded that the key to achieving this goal would be determined by GFS using the right investment structures, to minimise tax (ISA’s, pensions and portfolio’s) not just now but in the future.

Sue could actually afford to take less risk than she originally felt comfortable with as the growth required by her investments was relatively low.

Having determined the above, the final piece in the jigsaw was to establish an investment strategy which incorporated risk and investment management bespoke to Sue’s needs. In order to achieve this, Generation Financial Services introduced Sue personally to an investment manager to work closely with us to achieve her goals for her personal financial planning.

Once Sue confirmed that this was the path she wanted to follow to meet her objectives, we determined how her current arrangements could fulfil her requirements. With our advice, Sue consulted with her employer to put in place a bonus sacrifice arrangement that would increase her pension contribution that was tax efficient for Sue and her employer.

Where her existing arrangements could not meet her on going needs we looked at arranging alternative solutions. In her case we set up a SIPP and transferred some of her existing pensions into it so that it could be managed by her DFM (discretionary fund manager). Sue also transferred her ISA arrangements to them so that they could be managed in line with her overall investment strategy.

GFS completed regular reviews with the DFM, the first one only 3 months after they were appointed, to ensure they remained on track with the strategy and to provide Sue with some piece of mind and a live overview of their on-going management.

Developing and implementing this core strategy has enabled Sue to consider other specialist tax investments such as EIS’s to add value to her overall financial planning as well as helping her to reduce her tax liabilities.