Sometimes success doesn’t guarantee security; and sometimes even the best made plans won’t deliver your goals.
Peter was, and still is, an incredibly successful author and director of his own business, with great annual turnover and significant capital in his company. Peter was also a financial planning convert, who saw the value in taking advice and had formulated a plan and put a strategy in place for his future. However, not all was as it seemed, and his future security was a risk.
When Peter approach Efficient Portfolio, he wanted us to assess his existing savings, investments and pensions, just to see if they were still suitable. Sadly, after reviewing them, we could see that he was actually on track to run out of money in later life; a problem which stood to ruin his plans for the future.
Creating a financial planning strategy is incredibly important to your future security and success, but, almost more important, is to ensure that you continually review what you have in place. Your needs, interest rates and your attitude to risk will continually evolve, as will the charges you pay, so looking at your portfolio on an annual basis is critical if you want to make sure that your plans adapt with you. This was the fundamental problem with Peter’s planning, so we wanted to see what changes we could make to rectify the situation.
Using Lifetime Cash-Flow Forecasting and a more holistic approach to financial planning, we were able to identify ways to increase investment returns, reduce risk and minimise tax. And we aren’t talking about saving or making a few hundred pounds: The adjustments we made could result in Peter’s children inheriting an additional £1.4m in today’s terms, even if Peter and his wife live to be 100.
Just because something works at the start, doesn’t mean that it will continue to provide for your needs. Having continual clarity over your finances, through regular reviews and ongoing monitoring, is the key ingredient to your success. In Peter’s case, it was the difference between running out of money and being able to live a comfortable life and leave a powerful legacy.