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Split capital

I have just agreed the financial settlement on my divorce. What should I do now?

After months of legal wrangling over finances, Julia, a client of mine, has just been presented with a financial settlement for her divorce. She was exhausted and just wanted someone to take over the responsibility of sorting it all out.

First of all, they had sold their matrimonial home and the proceeds were sitting in the solicitor’s bank account – her share ready for release anytime.

My questions to her, what does she plan to do? Buy another house? Move to New Zealand to start a new life?

Answer, she still does not know – too exhausted and tired to decide, therefore advice at this stage is limited to finding two relatively easy access deposit accounts until her head has cleared a little more. Two accounts because of the £50,000 limit for the compensation scheme.

Second point – the two endowment policies. The settlement had determined they should be cashed in.

I looked at the surrender values, which, all things considered, did not look too bad. I advised that they could be hawked around the various market- makers in traded endowment policies but warned that if there was only a small difference, the amount of time it takes to get all the i’s dotted and t’s crossed could run into six months before receiving payment.

The decision here was to get figures and then decide whether surrender or selling was best option.

Third point – her pension – final-salary defined-benefit scheme. Her husband has been awarded a pension-sharing order for a percentage of her current transfer value and her solicitor had already written to the pension scheme trustees.

Julia had no idea what effect this would have on her projected pension at 60 so drafted a letter for her to send to the trustees in order to elicit the answers.

In that letter, we also requested a new nomination of beneficiary form so she could alter the beneficiary named in the event of her death before retirement. The solicitor had not mentioned this.

All the above points may seem very mundane or run of the mill to advisers but sometimes I think we need to take a raincheck and get back to basic, simple yet useful advice delivered to clients over a period of time.

There will be quite a bit more planning to do but after such emotional turmoil clients can only take in so much at any one time.

My view is that if we calmly and patiently deal with the matters we can see are troubling them, then we can put together our own list of what to look at next and then deliver this at their pace – unless we are up against a deadline.

You could also argue that it is much better to include the financial planner in the equation before it gets to the stage that Julia’s reached, but so many times it doesn’t and we are left to pick up some very fragile pieces.

Julia left the meeting feeling a weight had been lifted off her shoulders, even though in my opinion I had done very little, but the fact that I had listened and come up with solutions to what she perceived to be huge problems, mattered greatly to her.

Yvonne Goodwin is director of Yvonne Goodwin Wealth Management

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