How Accountants and Financial Planners Team Up for Success

When you work with a financial planner, the last thing you want to hear when asking for tax advice are the words: “That’s outside my area of expertise”. Some financial planners are in a position to offer some tax advisory... Read more

Financial planners working together to provide the best client to services.

Blog26th Apr 2024

By Tom La Dell

When you work with a financial planner, the last thing you want to hear when asking for tax advice are the words: “That’s outside my area of expertise”.

Some financial planners are in a position to offer some tax advisory services, but sometimes you need an accountant to oversee your financial plan alongside your financial adviser. That way, they can identify ways to improve tax efficiency and help you reach your goals together.

Thankfully, when you work with the AAB Group, you can benefit from financial planning and tax advice all under one roof. One of our clients, Nigel, even described us as a ‘one stop shop’.

When your financial planner and accountant work together, you can expect a more thorough service and better results. You’ll hopefully sleep soundly at night knowing that not only are you getting the most out of your savings, investments, pensions, and protection insurance, but you’ve been given everything you need to achieve your goals from an aligned and responsive team.

If you’re wondering how accountants and financial planners work together in practice, take a look at our client Jack’s story below:

Meet Jack

Jack got in touch with us in 2023 after learning about our approach to financial planning and accounting. He was in the process of selling his business and wanted to find a way to retire comfortably alongside his wife Fiona.

He didn’t want an adviser who’d offer a ‘copy and pasted’ solution based on a glance at his financial situation. What he really needed was a financial planning team willing to explore every aspect of his family’s finances and really shake things up.

Getting to know each other

When Jack arrived at our office to meet us, he was greeted by two members of the team: Tom, Chartered Financial Planner and Steve, Private Client Tax Adviser.

The main purpose of this initial conversation was to get to know Jack. Of course, we wanted to learn about his financial situation and discuss his priorities, but we also wanted to know who he was as a person and what made him tick. When we meet a client for the first time, we try to make it feel like a catch up with an old friend, rather than a serious business meeting or interrogation.

During our conversation, we learned that Jack and Fiona’s main priority was maintaining their lifestyle. They’d worked hard for their money and wanted to enjoy the fruits of their labours, but they also wanted to support their adult children who were experiencing difficulties moving up the property ladder after starting their own families.

Like many doting grandparents, they wanted to set money aside for the grandchildren too and were particularly interested in exploring tax-efficient ways of leaving a legacy.

The first steps

After our meeting, Tom got to work creating a detailed lifetime cashflow forecast based on Jack and Fiona’s income requirements and lifestyle costs.

He considered how their expenses could change over time. They’d need money for travel, hobbies, and other non-essential expenses while relatively young and in good health, but their outgoings would almost certainly taper off in the later years of their retirement.

The next step was to stress test our cashflow model against various possibilities. If, for example, interest rates rose significantly, a member of the family became critically ill, or both Jack and Fiona lived to 100, what impact would this have on their lifestyle?

With all this data to hand, Tom was able to identify the most suitable assets and financial products to meet the couple’s financial needs. He also created a detailed plan explaining exactly how much the couple could afford to give to their loved ones without impacting their financial stability and lifestyle.

The next phase

Of course, the financial plan wouldn’t be complete without Steve’s tax planning expertise. Steve explored ways to make sure the couple didn’t pay more tax than they needed to when it came to gifting money to their children.

The first step here was to make sure that any gifts made to Jack and Fiona’s children wouldn’t incur Capital Gains tax. Capital Gains tax arises when you sell an asset and make a profit or gain from it. We also wanted to ensure that Jack and Fiona didn’t give up control of these assets completely, as they’d said they wanted to retain protection of them.

So we suggested setting up trust. This would mean that the Capital Gains tax could be deferred and Jack and Fiona could protect their assets until they were ready to pass them on. This was also important in terms of helping to minimise any potential future inheritance tax.

We also identified – from the work that Tom had done with them – that their income was higher than their spending requirements, so there was room to make some additional gifts there. As such these gifts can be classed as being outside their estate, which means that they’re not subject to inheritance tax either.

Making our recommendations

We sat down with Jack and presented him with an in-depth report outlining his options. The report explained how he and Fiona could meet their objectives, the potential pitfalls and a specific timeline showing when inheritance tax savings would need to be made.

We also made recommendations regarding Jack’s pension and investments. Pensions can provide an incredibly tax-efficient way of saving for retirement, but when we looked into Jack’s pension arrangements, we found them to be outdated and inefficient. To take full advantage of their tax-efficient benefits, we needed to restructure Jack’s nest egg.

We advised Jack that he could strengthen his portfolio, increase his returns and reduce his tax bill with the help of a globally diversified, evidence-based approach to his investments.

The results

Jack told us he felt he’d been on a ‘transformative journey’ through collaborating with the AAB Group. After initially seeking a partner to navigate the complexities of selling his business and retiring comfortably, he found much more than just financial guidance; he discovered a team that viewed his family’s aspirations, lifestyle goals, and financial security as their priority.

The collaborative efforts of Tom, our Chartered Financial Planner, and Steve, our Private Client Tax Adviser, ensured that every facet of Jack’s financial landscape was meticulously analysed and optimised. This not only included a detailed lifetime cashflow forecast and stress testing against various life scenarios, but also a sophisticated tax planning strategy that maximised Jack’s ability to support his family while minimising their tax liabilities.

Knowing that his and Fiona’s lifestyle can be maintained, their children supported, and a legacy left for their grandchildren, all while ensuring tax efficiency, helped Jack sleep better at night. His story shows the significant difference comprehensive planning can make, setting a new standard for what clients should expect from their financial advisory teams.


By Tom La Dell

Related services

  • Retirement planning
  • Tax planning

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