This article is taken from our autumn 2020 edition of Equinox. You can view the full version here.
We had two clients, a married couple, in a very healthy financial position – in fact, the biggest problem they faced was that all the cashflow forecasts we created showed they would end up with too much money!
Both enjoyed high salaries with bonuses and share options and neither had any desire to retire. They lived a modest lifestyle and through this, their high incomes and inheritances received from their parents, they had accumulated a substantial portfolio.
The couple also had two children, the eldest of whom was 18, and they wanted to begin engaging with them about money. This was one area we agreed that we could explore.
Another area we found was important to them was ‘giving’. We discovered this through creating a ‘character diamond’ for the couple, which is a technique used to highlight certain beliefs and attributes, as seen below.
- North Star – your superpower, the thing that makes you different and makes you, ‘you’
- Flaws and masks – how you cover up your insecurities and vulnerabilities
- The hill you are prepared to die on – what you will always stand for, no matter what
- Kryptonite – the opposite to your North Star – what often gets in your way
With the knowledge and understanding that resulted from the exercise, we notionally divided their portfolio into three pots:
A core portfolio – This is for all their future needs. Cashflow forecasting confirmed they had more than enough.
Kids’ portfolio – Money for their children’s houses, pensions and a capital lump sum to get them started.
Charity portfolio – The amount they would like to gift to their own family foundation in the future, once created. In the meantime, growth was to be gifted annually. We would also put them in touch with Andrew Evans from Think Philanthropy to discover the areas the family were passionate about helping (Learn more about Andrew’s work here).
The money, for now, is still all in their name, but we report under the notional titles. As the clients become comfortable and therefore confident with the strategy, they can physically gift the money over time. With a little thought around the clients’ values, we achieved:
- more engagement from the couple by helping identify what was important to them
- better planning around how and when to help the kids
- greater family involvement with the money
- a large future charity donation which will also help with inheritance tax mitigation
This is just one of many examples where, by exploring the values you hold, you can create a financial plan that extends beyond your own life and makes a positive difference to the people and causes you hold dear.
Find out more
If you are interested in learning more about how your wealth can make a positive difference to the causes close to your heart, get in touch here or call us on 0808 168 0748.
Disclaimer: The content contained in this blog represents represents the opinions of Equilibrium Investment Management LLP (EIM) and Equilibrium Financial Planning LLP (EFP). The commentary in no way constitutes a solicitation of investment advice. It should not be relied upon in making investment decisions and is intended solely for the entertainment of the viewer. Past performance is never a guide to future performance. Investments may (will) fall as well as rise and you may not get back your original investment.’