Retirement Series Episode 3 – Things to consider with your Financial Planner during retirement

In our new blog series, Leonard Birnie shares his expertise on preparing for your retirement. In this third episode, Leonard shares the things you need to consider during retirement.

A significant part of our job as Financial Planners is speaking to clients regularly during their retirement years, which gives us a lot of knowledge about their experiences.

In this blog, I will be talking through the main things we find clients are discussing with us during retirement. If you are considering seeking financial planning, you can find out what you can expect.

The majority of our clients essentially want to know three main things during our annual planning meetings:

  1. Will I continue to be ok financially in retirement?
  2. Am I making progress or continuing to remain on track to achieve the things that are important to me (goals and aspirations)?
  3. Am I getting value from the client/adviser relationship?

To provide context to the above, I have discussed below what our Financial Planners at MHA Tait Walker focus on during our discussions with clients. The main elements of maintaining a good financial plan in retirement are:

  1. Ensuring a client’s financial plan is regularly updated;
  2. Stress testing a client’s financial plan and giving a detailed breakdown of the investments;
  3. Providing a detailed overview of charges

1. Ensuring a client’s financial plan is up to date

Asking the right questions, at the right time – during an annual financial planning review, clients and planners look forward and consider important issue with the client. At this point, asking the right questions can be the difference between the client’s financial plan changing and evolving or it remaining stagnant.

Examples of good questions and answers we typically see are:

‘Are you currently getting everything you want from retirement?’

The answer to this can fundamentally shift the financial plan.

‘What does the average week look like for you?’

As Financial Planners, we want to know how our clients have adjusted to retirement and how they continue to adjust for retirement.

‘Have there been any or can you foresee any big changes to your personal situation over the next few years?’

These type of questions allow clients to evaluate what has happened/might happen and importantly, have a plan financially for any changes.

Cashflow Modelling – The main way our clients continue to assess and understand whether they are on track financially is via cashflow modelling. Cashflow modelling is used to forecast what a client’s financial future may look like, given a set of prudent assumptions. In our experience, Cashflow Modelling can lead to a variety of great outcomes:

  • They understand their financial future and have peace of mind that, if they stay the course, everything will be work out well.
  • They are able to understand their financial position on a much more fundamental level, allowing them to make decisions that may have previously seen them frozen by uncertainty (taking that once in a lifetime holiday, gifting money to loved ones/charity or moving abroad)
  • The cashflow may also show that they don’t quite have enough to achieve their goals and this can lead to a series of outcomes such as dialling back retirement or taking more risk within their portfolio.

2. Stress testing a client’s financial plan and providing breakdown of investments

Peace of mind is often the main reason, in our experience, that a client seeks financial planning advice. The nature of uncertainty is uncomfortable to anyone psychologically and the financial repercussions of getting things wrong in retirement are often our clients’ biggest worry.

Stress testing a client’s future – As part of cashflow modelling, we demonstrate using a variety of scenarios where a financial plan may come undone. Our aim is to control as many factors as we can in creating a stable plan for our clients to have peace of mind.

Sometimes, this involves talking through market crashes and financial corrections within the market. Nobody likes the idea of losing money, but a great cashflow plan can demonstrate that, given time and prudence, we can mitigate a lot of the uncertainty, allowing clients to live the lives they want in retirement with confidence.

Detailed breakdown of investments – part of our ethos at MHA Tait Walker is that client’s deserve to be educated regarding their investments. We believe a client should understand where their money is invested, what this means regarding their plan and, importantly, that their own views be taken into account when structuring their portfolio. Evaluating investments each year is incredibly important to assess:

  1. Are they taking the correct and prudent level of risk given their individual circumstances?
  2. Are any of their investments performing unexpectedly and do we need to make proactive changes to their portfolio?
  3. Are the investments on track over the longer-term to deliver on our clients return expectations (how much money they need to make) to fulfil their goals in retirement?

3. Providing a detailed overview of charges

Having a financial plan costs money. Our job is to be entirely transparent with our clients to ensure they understand the following:

  1. How much they are paying to investment managers, platform providers (the underlying technology behind a client’s portfolio) and their financial planner?
  2. What service is this money paying for?

By highlighting the above in detail, it allows our clients to make a decision on whether they feel they are getting value for money.

Tips for retirement planning infographic

Other episodes in this blog series

Episode 1 – Five key steps to preparing
Episode 2 – Things to consider at retirement

Contact us

To discuss your retirement options, please contact Leonard Birnie at leonard.birnie@taitwalker.co.uk.

This blog is for information purposes only and should not be advice or a recommendation to act. You should always seek independent financial advice before taking any action with your pensions.

Tax advice is not regulated by the Financial Conduct Authority.

MHA Tait Walker Wealth Management is a trading style of Tait Walker Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority. Company Number 5674020. Incorporated in England. Tait Walker LLP trading as MHA Tait Walker is a member of MHA. MHA is an independent member of Baker Tilly International Limited, the members of which are separate and independent legal entities.