17 April 24

Helping clients through life events (and the tax planning opportunities along the way)

According to John Lennon, "Life is what happens when you're busy making other plans." He wasn’t wrong. Life events can have a significant impact on a client's financial wellbeing and will often trigger the need for a conversation with a professional financial planner, either to develop a structured financial plan or to update an existing one. Here are some of the most common life events that advised clients are likely to face during their lifetime:


  • Marriage or civil partnership – which can lead to the combining of finances, the need for protection insurance, and possible changes to Inheritance Tax (IHT) planning.
  • Buying a first home or moving home: There are significant financial implications to consider, including mortgages, potential stamp duty costs, and ongoing expenses.
  • Starting a family or paying for school fees/university: This can put a strain on household income and increase the need for income-generating investments
  • Divorce: this could mean clients being forced to sell or relinquish assets, seek alternative income streams or make significant changes to IHT planning
  • Retirement: Retirement planning is crucial to ensure clients have enough income to meet their lifestyle needs in retirement.
  • Inheritance: Clients inheriting money or other assets need to understand the tax implications and how best to manage their windfall without incurring an IHT liability.


How often should tax planning come up in client discussions?

As the new tax year begins, tax planning might be the furthest thing from the minds of most of your clients. Whereas life events, of course happen all year-round. And while tax planning may not be applicable for all of those life events mentioned, it’s something that perhaps should always be part of meetings with clients. Yet a 2023 study by HSBC Life suggested that while 82% of advisers’ clients are higher rate or additional rate taxpayers, two out of five advisers do not routinely explain the benefits of tax efficiency on investments.[1] This seems to be a missed opportunity. Isn’t it time for tax planning to become an essential part of life planning?


As any financial planner knows, hoping for the best is not a responsible financial strategy, and financial advisers are duty-bound to encourage clients to take action before something happens to potentially derail their life plans. The Financial Conduct Authority's (FCA) Consumer Duty legislation, which came into effect from July 2023, places a greater emphasis on ensuring client outcomes. Helping clients navigate life events falls squarely within this remit, and tax planning forms a key part of the equation.


Also, tax planning is a complex area, and most clients won't have the knowledge or desire to do it themselves. This is where a financial adviser can truly demonstrate the value of their expertise. By considering tax implications – and offering tax planning solutions throughout the advice process – advisers can help clients improve their overall financial position at practically any stage of life.


Understanding the ‘ripple effect’
Big life events can sometimes trigger smaller financial events, and this is really where an adviser can demonstrate value. Spotting the ‘ripple effects’ and identifying planning opportunities early can, therefore, turn life events into helpful opportunities to review and fine-tune the client’s overall financial plan. The UK’s current prevalence of ‘fiscal drag’, where higher inflation has pushed more people into higher tax brackets, means more clients are likely to be facing higher tax bills and needing their money to go further. Life events such as those mentioned above are only likely to make this need more urgent.


Advising on life events with Triple Point

Life events can often be a time of upheaval and uncertainty. But financial planning around life events should not just focus on the difficult conversations around the scary stuff (divorce, redundancy, ill health, for example), it can be about those positive life changes too. That’s why we have created different scenarios where tax-efficient investments can be complementary for planning purposes over someone’s lifetime. These scenarios include investing a bonus, taking profits from a business, intergenerational wealth planning, inheriting wealth, offsetting pension income, and selling a business.


At Triple Point, we say that “significant events need significant planning” because it helps to highlight the advice opportunities for advisers. The client planning scenarios we use have been built from years of conversations with financial planners about how, when and why they recommend tax-efficient investments to their clients. We think these scenarios could be used to help more clients feel financially confident about facing up to some of life’s big challenges, and even some of the smaller ones too.


To find out more about how tax-efficient investing can help with all manner of life events, join us for two hours of structured CPD and interactive roundtable discussions at our latest Horizon Series events: Tax planning for life’s key events. Book your place from a choice of 16 locations throughout May and June.



Important information

Tax treatment depends on the individual circumstances of the investor and is subject to change. This financial promotion has been issued by Triple Point Administration LLP which is authorised and regulated by the Financial Conduct Authority no. 618187.



[1] https://www.life.hsbc.co.uk/three-i-report/

Tags on this post: adviser education