By Ross Martin, Accountancy Director at Hive Business.
As the American business magnate Warren Buffett once said, risk comes from not knowing what you are doing. Fair enough, and our multi-disciplinary in-house specialists can help you find out, but what we aren’t licensed to do is act as financial advisors, tailoring specific recommendations for pensions, insurance and investments.
No matter, we’ve partnered with one of the most respected wealth management firms in the business, Brewin Dolphin, to make sure you’re covered. We spoke to Richard Morley, 38, investment manager at Brewin Dolphin — where he’s been for 18 years — to get a sense of what makes the firm so special, and so right for Hive clients…
Richard, tell us about your approach
We believe there are no shortcuts and, even with today’s technological advantages, the best way to understand your needs is to invest time with you. It helps that we are an independently owned firm — we’re listed on the London FTSE 250, but bound to no corporate group and are not interested in promoting specific products.
What do you do for dentists?
Dentists are business owners with a diverse variety of issues to consider, which often means they have little time to deal with their financial affairs. Very often, financial firms are introduced to dentists as they qualify by offering them insurance, and because they’re so busy they don’t review whether that firm is the best one to use for good quality, unbiased financial advice and can often miss out.
For example, dentists usually have a range of options for their pensions. Sometimes before we get in front of them they’ll have set up their own private pension arrangements in addition to the NHS scheme, but pension rules change all the time and the strategy has to adapt to get the best results.
If you earn over £150k, the amount you can put into your pension and gain tax relief starts to reduce quickly. People accruing NHS benefits often don’t know how much the NHS is actually putting into their pension — no fault of their own, but they need help to get this right and avoid crippling tax bills.
What’s the danger with pensions?
Putting money into a pension should be tax efficient, but if you exceed the annual contribution allowance you will owe tax on the additional contributions. It’s equally important to be aware of the lifetime allowance (the amount of benefit that you can draw from your pension without accruing a tax charge) which has recently reduced to £1m. If your NHS pension is predicted to be around £45k per year, or you have other pensions, you could suffer tax personally, or a reduction in your pension income. So getting regular advice is really important.
Unfortunately some well-known providers don’t have a full range of quality options. It’s important that dentists get to speak to someone who understands what they’re talking about, and not everyone understands the specific requirements of dentists. We have expertise across our 29 offices.
We launched a specialist service for dentists and small business owners who are looking to sell their practice. This includes a health check of their own finances and putting together some scenario modelling, so they can understand how they are going to achieve what they want, once they’ve sold and moved into retirement, or onto the next project.
What are some potential minefields for dentists?
The NHS pension scheme really can turn into an administrative nightmare. There are various different schemes and depending on when you started to pay in or the choices you’ve made, your benefits might look different. Figuring this out is about understanding what you may receive once you retire, bearing in mind all your other assets and income.
A lot of dentists have invested in residential property, but of course the tax changes to these assets have meant it might now be tax inefficient compared to other options. Dentists do tend to have big property portfolios instead of a healthy spread of assets. It’s about reaching a balance so that if one type of asset doesn’t perform well, you have other assets that can provide income.
What’s the difference between what you and Hive do?
What we’re looking at is an overall wealth service, focusing on the financial affairs of the individual. We split our roles into two: firstly our financial planner who is authorised to provide financial advice, and put together a wealth strategy; secondly an investment manager, like me, who on a day to day basis aims to achieve returns on the investments.
When it comes to making an exit, Hive do a great job of getting businesses up to a target value, and we want to make sure the individual who comes out the other side of a sale is properly looked after for the next 30 or 40 years, to minimise their tax burden and to make sure there’s plenty to pass on to the next generation, if that’s what they want.
What are the similarities?
We like Hive because we have exactly the same ethos. The customer comes first. It’s how we structure our firm. The longevity of Brewin Dolphin, established in 1762, supplies stability yet our services are evolving all the time, like Hive’s.
That’s important because dentists are different to the average client. We need to make sure we understand their needs so their experience is great because the vast majority of our business is through word of mouth referrals.
What makes you special among wealth managers?
My team has specialist knowledge in the dental sector which makes a big difference. Also, the feedback from our clients is that they trust us to give them the best advice and to manage their investments for the long term. We’re here to understand your financial goals and to help you achieve them.
How do you charge?
Wealth management with Brewin Dolphin is 1.5% up to £1m. The fee drops after £1m. There are no charges for initial conversations and meetings. We have offices all over the UK so someone local will be available for a face to face meeting.
- The value of investments and any income from them can fall and you may get back less than invested.
- Any tax allowances or thresholds mentioned are based on current legislation and personal circumstances, which are subject to change.
- The above does not constitute advice and the opinions expressed are not necessarily held throughout Brewin Dolphin.
- The information contained in this article is believed to be reliable and accurate, but without further investigation cannot be warranted as to accuracy or completeness.
If you would like to discuss how Brewin Dolphin and Hive can help you manage your wealth, please call 01872 300232 or email us at [email protected].