Shirley, how did you meet Nic?
It was a few years ago now. I remember coming back from meeting our advisers at the time and sitting down with my daughter. She encouraged to me to take action as I was feeling frustrated and confused.
How were you confused?
I’d been with the advisory firm for a number of years, in fact, James (ex-husband) had been instrumental in employing them, so after our divorce, it was too overwhelming to think about options. It wasn’t as if they did anything wrong or even lost me money, other than in 2008, when everyone I know had problems with their investments. It was the realisation that I could be having these same conversations for the next 10, 15 20 or more years…and I thought to myself, I’m not really getting a lot from these meetings.
Did you have an idea then in terms of what you wanted?
As I said it was more about what I didn’t want. It was only when I met Nic, did we start talking about what I wanted?
Let me bring Nic in now. Can you recall your first meetings?
Yes I can. Shirley brought with her investment papers and as I recall wanted some form of reassurance
What do you mean reassurance?
I some respects, for me Shirley didn’t want to feel she had been taken advantage of. I actually confirmed what she was doing, was what most people had done over many years. That was a sense of relief to her. We then had a conversation. I wanted to understand why she was frustrated with things and as we developed a rapport, we decided to meet again.
Shirley can recall your next meeting?
That’s was when I wanted to understand more about what I was investing into, and whether I had enough money for the future.
What sort of things did you discuss?
I must admit I was pretty focused on my investments. In all honesty, I didn’t like the charges. I recall having arguments with James when we were married about the costs. So we talked about the fees and actually what I was paying for? But I do remember being more than taken aback.
What do you mean, taken aback?
Nic explained in more detail about costs and charges. I had a letter from the advisers to confirm their fees, and from memory it was around 1%. Yet when Nic started to explain in more detail, it appeared the actual costs were double. Even now I couldn’t really believe it.
I presume Nic you must have calculated these for Shirley
Yes we did. It’s a common issue. From a technical perspective there are what we call explicit and implicit costs. Most clients are aware of explicit costs, but implicit costs never seem to get aired.
What are implicit costs?
Essentially, it’s the other costs. From stamp duty, brokers commissions, market spreads and trading volume. All of which can mount up. It can easily add over 1% on top of the annual management costs. And if clients have sub funds, in other words one fund owns another fund, then there is another layer of costs. Suffice to say, its important to identify these costs so then you can then find a way to make the system work for you.. not the fund managers.
So Shirley when you were aware of this information what did you do?
It was when we multiplied the 2% to the portfolio, I think then and there I decided I wanted to talk more to Nic about my options.
Did you change the investments Nic?
Not at first it was more about helping Shirley understand what she had got. We could then think about what she wanted. I didn’t see the need to rush out of an investment without a strategy for the future.
What do you mean by strategy?
We are all on a journey and money plays a vital role. We therefore need to understand what is important for people. How they see their future? What hopes and aspirations they have? Above all we work hard to find out what gives clients a sense of contentment. This provides us with the reasons for a strategy.
Is that it was for you Shirley?
For me is not having to worry about money. It’s knowing whether the world goes mad for a short while, that I have confidence everything will be OK.
How do you see your future?
I really feel happy. I feel that from a financial perspective, we have a good plan.
I also feel that I have a better sense of my money and how it works in my life. We talked about giving money to charities, which I now I a plan….and its really satisfying. I have found a new found enthusiasm being involved with the investments and decisions. I also have what I call fun money. I take about £10,000 from my portfolio and spend it in the most frivolous way. Last year, I booked 3 days in Paris for Sophie and Izzy. We had dinner at the Jules Verne and looked out over the splendour of Paris. I toasted my old fund managers with a glass of champagne and thanked them for this dinner. Well, I did so with a big smile on my face. I think I picked up irony from James!
Shirley, had been married to James for 20 years and they divorced 5 years ago. James and Shirley have two daughters. Sophie and Isabelle. Sophie, her daughter, was recently married to David. Shirley decided to move from Scotland to be near her daughters. Sophie was also pregnant.
Shirley met James at University. She studied economics and worked in the city before Sophie was born. Fortunately, James was moving up the ranks in a large Energy company which enabled Shirley to stay at home. Shirley was an avid reader and over the years has always been interested in law and politics. As time passed, their marriage started to become strained and when Shirley looked back, she realised that their children kept them together probably 10 years longer than maybe was best for either of them.
When Shirley divorced, she continued to use a firm of discretionary fund managers that James had originally employed. Over the years, she had 3 different people she dealt with.
Shirley liked the idea on investing in capital markets and her desire to know more was encouraged… and part of our discussions help test her knowledge. Shirley has ideas of how she wants to distribute her capital over time and investing in the market keeps her options open.
Shirley ‘s story is ongoing as there is much we talk about. But helping her understand what she was paying for and what she was getting created the foundation to move forward positively. It’s finding a way to get great value.
We listened to Shirley and over time we better understood what she wanted for her future. The story continues.