Wealth Management
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Wealth Management
Carolyn Dunion talks to us about wealth management.
What is wealth management and why is it so important?
Wealth management is about looking after people’s assets – their cash, property and what they do with their income.
We tend to be dealing with investments, pensions, mortgages and protection – such as life insurance and critical illness plans, to make sure that you’re protecting what you have.
It’s about how your accumulating income is best looked after for growth but also, at the point of using it – which is the fun part – that you are navigating the tax regime as efficiently as possible.
Who can benefit from wealth management?
There will be a benefit to most people. It’s useful to anybody who is contributing to a pension or would like to, or anybody who’s got savings that they want to make the best of.
At McKendry Dunion we look at things holistically, so we can also help with mortgages, the acquisition of assets and the protection of them, as well.
There is a limit, because there are costs involved in having a financial planner. You really do need to have a certain amount of assets, cash or otherwise, for that role to be beneficial.
The Financial Conduct Authority has brought out recent legislation called Consumer Duty, looking at the value of that advice and whether it’s beneficial to the client and the financial planner.
We’re seeing increasingly that financial planners will only take on clients with a certain amount of investable assets. The bar for that can be quite high, which can be a bit frustrating because it creates an advice gap.
People quite often don’t understand how pensions and investments work, and what they can do to improve their circumstances. Most of them would probably benefit from a conversation. Whether there’s an ongoing financial planning or wealth management need will depend on your overall level of wealth.
The approach we take is to speak to everybody for an initial conversation and advice. We’ll explore whether we can add value to your situation, either now or in the future. I would encourage everybody to consider having that initial chat, and we would then guide them as to whether an ongoing relationship is actually in their best interests.
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What is included in wealth management?
It depends on your circumstances. We can help with all the things I’ve mentioned, like savings, investments, pensions and mortgages, and we can also help those who may be high net worth individuals to look at estate planning and how to manage any potential inheritance tax.
That might take in the creation and management of Trusts. If people are very wealthy, we can help ensure that future generations inherit money in the most tax efficient way.
What costs are involved with wealth management?
I think people are a bit nervous about what they might be left with as a bill. That depends on the relationship. If you have an ongoing management need, your advisor is going to be reviewing your arrangements annually and be at your beck and call if circumstances change. In this case, there’s usually an ongoing cost.
That tends to come as a percentage of your pension fund or investments. If it’s not in your best interest to have that ongoing relationship, we might just charge a setup fee.
For somebody quite young, who is setting up a pension for the first time and won’t have an awful lot of cash in it, we can do a one-off cost to help them make sure they have the most suitable product. All those fees are discussed upfront.
Depending on the product, there’ll likely be some fund management fees and things like that. Again, they tend to come from the pension pot or the ISA. But you will never be put in a position where you’re not aware of the costs, or not given the opportunity to consider them and decide if it’s right for you.
What else do we need to know about wealth management advice?
We provide all the usual good, technical advice so that you know what the opportunities are. We ensure you’re up to date with the current legislation, as you would expect.
But for a lot of people, their relationship with a financial planner gives them reassurance – in knowing what their situation is.
We’re here for reassurance, clarity and to provide a sounding board – and sometimes a little emotional support. It’s not uncommon for us to deal with people at difficult points in their life.
Maybe they’ve lost somebody and inherited money, or they’re coming to realise that they don’t have enough in their pensions.
It can be an opportunity to take a weight off your mind. You’ve addressed the situation, you know where you’re at and what your opportunities are. We’re absolutely here for emotional support as well as all the technical side.
Because we like to build long term relationships, we see people go through all the different stages of their lives. That’s a real privilege.
The value of pensions & investments and any income from them can fall as well as rise. You may not get back the amount originally invested.
