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Example of how working with a financial adviser can help your finances

Example 1, Pension consolidation;

Alice comes to the realisation that she needs help with her pension arrangements at age 47, she has had several jobs during her work career and has a selection of different pensions.

Alice is wondering what happens with these different pensions once she retires. She would like to know when she can take income and whether these pensions are invested in the correct funds?

Alice has heard various terms like 'consolidating pensions', ‘SIPPs', 'pension freedoms', but doesn't really know what they mean!

So who does Alice talk to? is it a lawyer, an accountant, or a financial adviser?

Accountants will have a very good understanding about pension input amounts and how these relate to Alice's tax return (i.e. what Alice can deduct in her net adjusted income) but they do not understand the intricacies of pensions, and are not allowed to recommend products or providers. Lawyers deal with the law so Alice shouldn’t ever go to them about her pension, except if she is getting divorced, then they should refer her to a financial adviser concerning pension considerations to get advice!

Once Alice gets in touch with a financial adviser they set up a meeting. Alice starts discussing her needs and objectives, and a risk profile and fact find is completed.

The adviser goes away and analyses this information. They agree to meet again after he is given enough time to complete a comprehensive review which involves writing to all of her pension providers. The adviser finds that two of her pensions have limited income options post retirement, their charges are comparatively high, and the selection of funds is poor compared to elsewhere in the market. The adviser shows the comparisons at the next meeting as well as providing recommended options and Alice decides to consolidate two of her pensions into a SIPP, while the funds she had chosen within her other pensions are swapped for funds that better reflect her needs and objectives/risk profile/capacity for loss (these funds have also outperformed the current funds over a 1, 3, and 5 year period, and are more diversified in the asset sectors they invest in).

Cambridge PensionsThe analyses alludes to multiple considerations involving all of her finances and Alice soon realises that her pension decisions are directly affected by other considerations such as how much tax she pays, whether she contributes to an ISA or general investment account, and how her inheritance from her grandmother can used. Not only has the meeting with the adviser organised her pension and finances but just as importantly it has allowed her to understand her assets and understand all available options.

Cambridge pensions is a pension expert but is also a financial advising company (Matrix Financial Ltd) offering every type of personal financial advice. Please get in touch to discuss all of your financial needs, not just pension needs!

While we keep information on the website as up to date and as accurate as possible, the information on this website does not form part of our advice process. Cambridge Pensions Ltd cannot accept any liability for any decisions made by a client or member of the general public based on any information contained on this website. The value of your investments can go down as well as up and you may get back less than has been paid in.

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