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't 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't 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' hire of the same 30ft vessel in the Mediterranean.
If the argument is: “Ah, but he hasn't 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