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Giving advice on retirement advice is not plain sailing

You were kind enough to publish a comment that I made concerning Sofa and

chartered status some time ago, particularly with reference to what is

perceived as professionalism in our industry.

I was interested to see the retirement income case study for your awards

competition run in association with Sofa and I think this illustrates the

point I was trying to make.

I refer in particular to the mention of a new boat for £40,000 and the

intention to pass the summer cruising the Mediterranean. Now, I know that

the question-setters will merely say this is a theoretical case study. But

we don&#39t deal with theoretical people, nor with theoretical money, and

therefore I think that anything that is put in a question ought to be

looked at as fair game.

The sum of £40,000 would buy you at best a new 30ft sailing boat. If you

wanted a motor, you wouldn&#39t be able to have a seagoing vessel at all, just

a river cruiser, for that sort of money. However, £5,000 would buy you six

weeks&#39 hire of the same 30ft vessel in the Mediterranean.

If the argument is: “Ah, but he hasn&#39t got a boat at the end of the

period,” then £10,000 would buy him an inshore dinghy which he could enjoy

for sailing weekends, thus saving at least £25,000.

It is widely accepted that boats are a black hole down which money disappears.

The other parts of the question concerning phased vesting, retirement

income drawdown and annuities are, of course, subjects which will be

wrestled with by the entrants to the competition.

My point is that financial planning should be approached holistically and

facts such as those presented by the question-setter should not be

overlooked or glossed over merely to set up the question in a satisfactory


To say they are looking to see how entrants would tackle the question of

the various pension options is all very well but, as you can see, there may

be more money to be saved by looking at a side-issue than there might be in

addressing the main question.

Not to offer the client an opinion would be, at best, dilatory and, at

worst, a dereliction of duty of care. Could this be regarded as


Harry Katz

Norwest Consultants,




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