The wealth management landscape is complex at all levels. For High Net Worth Clients in particular, it is filled with options and services from large investment banks to small wealth management boutiques all competing. This month we hear how our High Net Worth Adviser Khalil Kasparis helped some new clients after they grew unhappy with their existing advisers at a top private bank.
The wealth management market is very much segmented and filtering through this to assess the best service, relationship, cost, security, and breath of offering is often not a simple process. Combine this with an evolving landscape and making sure your needs are always met in full, can be difficult.
We share a recent example of a client that went through this process and outline why they felt most comfortable with the decision they came to.
Mr and Mrs V were clients of a large bank for over 15 years. They both have had successful careers, with Mrs V reaching a senior executive position at a financial services company and Mr V now working with entrepreneurs following the successful sale of his second venture. They are in their early 50’s, semi-retired but still enjoy working with/supporting small to medium sized businesses alongside travelling and spending time with family.
The offering received from their current advisors became more standardised over time, limited in scope and the service/relationship became less personalised with them being allocated a different advisor almost every other year. With all costs adding up to around 2% a year and having a significant sum of investable assets – they began to consider alternative options.
Their main goals were to invest their assets sensibly, growing them at a reasonable rate above inflation, after fees and charges and without taking a high level of risk. Security of their assets was very important to Mr and Mrs V and in their view, being able to hold them at a large and well-known private bank provided them with comfort. Being able to secure a loan against the value of their portfolio was important to them, as Mr and Mrs V often use this to fund investments in small private businesses and property development.
In addition, Mr and Mrs V wanted tax efficiency in the way their assets were managed and structured. They wanted to meet their expenditure needs in full first, but then preserve their estate for the next generation and to reduce their income tax liability. They wanted more control and transparency over investment decisions, holistic financial planning, and pension advice. Alongside this, they wanted ongoing investment management, a consistent level of service and a more valuable relationship.
After reaching out to Khalil they were able to benefit from an approach combining private banking capabilities and the flexibility of a small boutique to best met their needs. We established two general investment accounts, an ISA each, an offshore bond in Mrs V’s name and two SIPP accounts. We also set up a Lombard loan (a credit facility using their investments as security) at a rate significantly lower than their previous provider.
We constructed an appropriate portfolio in line with their risk preference across all the accounts. This led to a lower ongoing income tax liability, despite the portfolio having a higher level of income. We were also able to deliver a more tailored and increased service proposition with more regular reviews and ongoing communication. We were able to achieve all of this while reducing their costs by around 25%.
Please note
- The value of investments can go down as well as up and you may not get back the full amount invested.
- Past performance Is not a guide to the future.
- Income from investments is not guaranteed and the future yield may be higher or lower.
- Taxation depends on the individual circumstances of the investor as well as tax law and HMRC practices, all of which can change.
- Tax advice is not regulated by the Financial Conduct Authority.
- Forecasting relies on several assumptions and there is no guarantee that these will be born out in reality.
Investment Solutions is a firm of independent financial advisers authorised and regulated by the Financial Conduct Authority, registration number 533559.
The information provided is not intended to be a personal recommendation or advice. It is important to take professional tailored advice before making any decision in relation to your personal finances.
