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Personal Clients
What is a Personal Client? Usually an employed or self employed person or couple, even an entire family. Where they require independent financial advice in respect of known and sometimes, previously unknown issues. Our personal clients can opt for various methods to remunerate us for the independent financial advice provided. The vast majority of our personal clients come to us after having been recommended to speak to us, quite often by their accountant, a relative or a close friend. It goes without saying that different personal clients will have different priorities, one particular issue is concerning many people at this time, and that is the vast sums of money being collected by the Government through imposition of Inheritance Tax and the value of their homes. LFC Financial Management has held a number of well attended seminars on this precise subject and all that surrounds it. An example of the “proactive” quality of the advice and solutions available to clients; and in reality necessary in the ever changing legislative environment apparently designed to fill the Treasury at your expense. There are many different areas that potentially need to be addressed. There are also many different products that have a wide variety of structures to suit the various needs of the client, some of the main types are briefly described below: Term Assurance - The ability of one or more people to insure their lives or lives of others for whatever amount they select, for a specified length of time. For this type of contract to pay out a claimable event would have to take place within the specified term, should the insured survive past the specified term the contract will then cease without any value whatsoever. Normally one of the cheaper forms of insuring a life. Careful consideration needs to be given to not only how much cover and for how long, but also who should the money got to. As this is a simple insurance many overlook the fact that in many cases the appropriate Trust arrangement would be of great benefit at the time of a claim. Advice and/or implementation is available through LFC. Mortgage Protection/Decreasing Term Assurance - Another type of term assurance contract that potentially has the lowest costs of all. Invariably this contract would be used to protect a “repayment” mortgage. Another variant could provide a predetermined income for a period of time to assist a bereaved family maintain its standard of living. Careful selection of the right contract for the job and an understanding of what it will not do as well as what it will do are terribly important, even for such a simple contract as this. Advice and/or implementation is available through LFC. Whole of Life - As it’s name suggests, this contract provides cover for the whole of ones life, it will always pay out. This type of contract also has an investment content and if it grows well could pay out a greater amount than the sum insured for. As it has an investment content a client should be aware that there is potential risk, the nature of the risk should be understood prior to entering into a contract. There are also a number of different premium types available to the client, some potentially less beneficial than others. A much utilised and valuable contract to assist with Inheritance Tax Planning, but essential that the correct Trust arrangements are put in place, otherwise the liability to IHT could possibly be much higher. Advice and/or implementation is available through LFC. There are many variants of all of the Life Cover contracts above and good independent advice should be sought to determine which contracts are best suited to address a client's needs affordably. Critical Illness Cover - Introduced to the UK in the 1980’s and now an important element of considered financial planning, this type of cover is designed to pay out a lump sum if the person insured suffers one of a list of specified illnesses. Particularly beneficial when a Critical Illness strikes as if set up correctly it could provide the right amount of funds to pay off debts, a mortgage being particularly important; at a time when the insured needs to recuperate and have as few concerns as possible. Selecting a contract that not only gives value for money but that also has certain important guarantees is of paramount importance, as is identifying the correct amount of benefit required. Advice and/or implementation is available through LFC. Income Protection - Protection of income if unable to work through illness or disability assists the insured and their family in maintaining a decent standard of living by providing income over the long term. These products are designed to pay out over the long term, so could potentially provide an income right through to normal retirement age. For those in employment the contract can be tailored to fit in with sick pay arrangements, which will have a time limit to them. The self employed the need to decide with their financial adviser when they would want this contract to start paying out. Not to be confused with the short term contracts offered typically by banks, supermarkets etc, which will only pay out for a few months. Advice and/or implementation is available through LFC. Pensions - Structured pension planning for income in retirement and tax efficiency today, (the latter often overlooked) has been in use for several decades, it is only in recent years that it has become apparent that central government are looking for individuals to make more provision for income in retirement. The UK Government is currently considering compelling both employers and employees to contribute to employee pensions, thereby relieving some of the pressure on future Governments. It may happen, it may not, but you certainly need to know if it affects you. Pension legislation changes dramatically on You are not certain to make a profit: You may make a loss. You may not get back the full amount you invested. Private Medical Insurance - For those that are not prepared to be subject to the “postcode lottery” for treatment on the NHS or those that do not want or cannot afford to be on a lengthy waiting list due to family or work/business commitments. The perception of Private Medical Insurance is that it is expensive, indeed some contracts are exactly that. An area where it is notoriously difficult for the layman to make direct comparisons and obtain the most appropriate contract at the right price. This type of insurance is annually renewable and unfortunately (at the present time) does increase in cost the older you get, all the more reason to make sure that you have the right contract at outset and that you are advised if and when a better value contract comes to market. LFC refer all enquiries for this product to an authorised specialist in the field, who is a member of the same network as ourselves. Savings - Regular savings is the backbone of individual national wealth simply because it is regimented and regular and therefore more constant. A huge array of products in the market to choose from, some offering tax advantages and low charges too. Others that incorporate additional benefits that may be of use such as life cover. It is sensible for the client to identify the purpose for which they are saving and when they will require access to the monies, also of course if there are any penalties for accessing funds. With so many product variants a prospective saver really needs to get reliable professional advice to identify the best product for their particular circumstances. Advice and/or implementation is available through LFC. Investments (both on and off-shore) - The government currently offer tax incentives for those wishing to invest lump sums into ISA’s (Individual Savings Accounts) as they did with PEP’s (Personal Equity Plans) and TESSA’s (Tax Exempt Special Savings Accounts), however they do place limits on their generosity and the amount payable into ISA’s in any one tax year is capped and reviewable by the government, so tax incentives could be withdrawn in the future. For those that wish to invest even small amounts, specialist advice should be sought. Those that wish to invest in excess of ISA annual limits need to consider portfolio structuring, identifying on or off shore placement, and also select from the myriad of different products and the THOUSANDS of funds to choose from. Putting together a well structured and flexible portfolio with the advice and assistance of a professional makes selection and placement so much more straightforward and also engenders genuine understanding of the investments held. Establishing levels of risk is essential to ensure that the portfolio spread reflects the clients attitudes to the risks that should or should not be taken with their monies. Advice and/or implementation is available through LFC. You are not certain to make a profit: You may make a loss. You may not get back the full amount you invested. Inheritance Tax Planning - The current “cash cow” for the government and likely to be relied upon by them for many years to come. Successive legislation introduced since 1997 to remove many of the tools for retaining family wealth and for the first time that we know of, legislation introduced that had a retrospective effect (Pre Owned Assets Tax), going back to 1985. Many people who made certain Trust arrangements at that time are either having to “unpick” these at great cost, or face greatly increased income tax bills. An unenviable position to be in at any time of ones life. Current legislation allows for certain Trust arrangements to be used, but specialist advice surrounding which Trust works best for a particular situation is really a must prior to making any commitment that cannot be undone. Plan this well and wealth can be passed onto the next generation, plan it poorly and all you could leave the next generation is huge bills and worry. Advice and/or implementation is available through LFC. Long Term Care - If you live in Mortgages (including Buy to Let) - First Time buyers, Remortgaging, Moving House, Investment Residential Mortgages (Buy to Let), Commercial Borrowing, Overseas Properties/ There will be a fee for mortgage advice. The precise amount will depend upon your circumstances but we estimate it to be £475.00. YOUR HOME MAY BE REPOSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. The Financial Services Authority may not regulate Buy to Let mortgages or Commercial mortgages. This calculator is for guidance only, the figures shown may not be the amount that you pay. Mortgage Payment Protection - A short term (12 or 24 months) temporary regular payment to enable the policyholder to meet their monthly mortgage payments and possibly the accompanying Life & Critical Illness contact premiums too. The policyholder determines the level of cover required and pays a monthly premium for the benefit. Annually renewable contract, the insurer can decline to renew or offer cover. Sold heavily by many of the High street lenders, but often offering poor value. Advice and/or implementation available through LFC. Regular Seminars - LFC organise various Seminars throughout the year on matters that can directly affect the financial wellbeing of an individual or family. Recent and current seminar topics include:
We aim to cover the topics that are of real importance to our clients and that can genuinely benefit them. We constantly review our seminar topics and inform our clients of upcoming events in good time. Should you require information on the content and dates of our next seminars please do get in touch here: info@lfcfm.com Tax Calculator - The following Inheritance Tax calculator is intended to give you a rough guide as to the potential tax your estate could be liable for, simply total up your entire estate including property, land, assets and cash. and enter the amount in the box provided. This is a complex subject and ideally we would arrange a consultation to discuss your options in detail. Please click here to use our inheritance tax calculator Some of the products/services shown are not, or may not be regulated by the Financial Services Authority
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