How can a financial planner help deputies and trustees get the best possible outcome for a seriously injured client?

How can a financial planner help deputies and trustees get the best possible outcome for a seriously injured client?

Published: 05 Nov 2020 Updated: 13 Apr 2023

Tilney has specialist expertise in helping deputies and trustees to look after their seriously injured clients. In this article, Paul Hudson and Jenny Whitehouse, both financial planners from our Leeds office, and Katherine Hopkins, a technical specialist in serious injury, consider how a financial planner can help to achieve the best financial outcome in these cases.

How do seriously injured clients differ from other financial planning clients?

Paul Hudson: A financial settlement awarded due to sustaining a serious injury often represents an extremely distressing and negative life-changing event, with lasting consequences. Discussion of the event or elements related to the injury, including the settlement, can lead to unwanted memories.

The money can become a subject of great emotion, anxiety and worry with questions such as ‘what will happen to me if it runs out?’ and ‘how can I keep it safe?’ often arising. Finances can end up being feared, not just by the client but also by their family and anyone close to them. Working with these clients is a massive responsibility and often has profound consequences. That’s why it’s so important to get things right from the outset.

Jenny Whitehouse: The way in which a client and their family perceive their money (or lack thereof) is crucial to their wellbeing. Being able to provide financial peace of mind can be a powerful and positive influence in this situation and can even aid in rehabilitation. My focus always is to support the deputy or trustee when they are dealing with the client and their loved ones by taking time to explain matters clearly, avoiding the use of jargon and putting matters in context when concerns arise.

What is the role of a financial planner in a serious injury settlement?

Paul: Creating and agreeing on a workable budget is the cornerstone of financial planning for seriously injured clients. Our advice is centred around this budget, which we often start to build during the pre-settlement stage or on our first meeting with the deputy or trustee and the client. Being fully aware of the current situation is fundamental to gaining an understanding of where the client would like to get to in the future and how we can help them in their journey.

Jenny: We start this budgeting process through the use of cashflow modelling in order to prepare a lifelong road map of the client’s finances. This can help to identify at an early stage where compromises may need to be made in terms of expenditure, ideally before any major financial commitments are made. It can be used to evaluate and compare different financial options available to the client. For someone who is seriously injured, cashflow modelling only too often demonstrates that it is their lack of money that needs to be carefully managed in the coming years.

Paul: Once the basic plan is in place, I can tweak the cashflow model to show any number of ‘what if’ scenarios. As an example, we look at the impact of different investment returns on the client’s ongoing ability to cover their expenses. It can be difficult for deputies and trustees to answer questions relating to investment risk on behalf of the client, but showing the results in a graphical format puts the numbers into context and helps discussions about attitudes to risk.

Also, as Jenny said, we avoid the use of jargon and actively encourage engagement and participation from the client and family members. We turn the numbers on a page into something more tangible by linking them with actual life events that the client can easily identify with.

Jenny: Sadly, I sometimes come across clients who have negative feelings towards a deputy who has the task of explaining why there are limitations on what is and is not achievable. I often find that cashflow modelling and budgeting helps to deflect these feelings. For example, a multi-million pound settlement may seem like a huge amount of money to a young claimant with a normal life expectancy, but it still needs careful planning and management over the years ahead. Turning numbers into a graphical format often leads to a ‘light bulb’ moment when what has been said suddenly makes sense. Simply hearing or seeing something presented in an alternative way by another party can trigger a different emotional response and understanding.

Katherine Hopkins: This budgeting and cashflow modelling is not a one-off exercise. The Office of the Public Guardian requires deputies to complete a report each year, explaining the financial decisions they have made and how they were in the best interests of the client. The report includes details of any investments held and requires confirmation that financial advice has been taken. Even if the deputy order does not specify that a financial adviser must be engaged, the Office of the Public Guardian would expect the deputy to do so in order to ensure that any investments are appropriate and meet the client’s needs.

The Trustee Act 2000 expects ‘proper advice’ to be obtained by the trustees in exercising their investment powers and for the investments to be reviewed on an ongoing basis. Our annual reviews are designed to help deputies and trustees perform their duties by analysing the ongoing suitability of investments for a client’s current circumstances and providing evidence that a thorough review has taken place. The review may include, for example, re-visiting the cashflow model to determine if any recent changes to the client’s expenses have impacted on the estimated sustainability of the investments and, if so, what changes need to be made.

A seriously injured client tends to have financial needs rather than financial goals and reviewing any changes to their circumstances on at least an annual basis not only fulfils the obligations outlined above, but also provides the peace of mind that we are all doing our best to ensure that the client’s needs continue to be met.

How have things changed in the Covid-19 world?

Paul: Working alongside a deputy or trustee to build trust with a seriously injured client has always been a very important aspect of my role. I regularly work with deputies and trustees where their client has a particular interest in investments. In the current environment, we have all read things in the press or online that are untrue or give a distorted explanation. It is sometimes difficult for deputies and trustees to allay their client’s fears as they may not be comfortable in discussing investments. Simply picking up the telephone myself to the client or arranging a video chat is often the most helpful thing I can do.

Katherine: Unfortunately, we expect in time to see claims arise which are either directly or indirectly related to Covid-19. These could result, for example, from accidental exposure of hospital patients to the virus or delays to diagnosis and treatment of other illnesses.

Can any financial planner help?

Katherine: In short, the answer is ‘yes’, but not all financial planners are specialists in this area and not all of them are backed by a technical team. At Tilney, we have a team of experts who are focused on the needs of clients who have experienced a personal injury or have suffered as a result of clinical negligence. Within this team, my role is to provide technical support on a national basis in order to enhance the high level of service already provided to deputies and trustees. The serious injury team also includes financial planners and investment managers who have many years of experience in this field. Financial planners like Paul and Jenny help the client and the deputy or trustee understand the impact of the choices available so that they are able to make informed decisions. The financial planners and investment managers typically work hand-in-hand to identify a portfolio for the client that aims to maximise returns without exceeding the agreed tolerance for investment risk. The focus of the serious injury team is very much on providing a specialised and tailored service which has the client’s needs at its heart.

Speak to Tilney

Tilney’s experts help many trustees and deputies ensure financial security for their seriously injured clients. To find out more about how we can assist you, call us on 020 7189 2400 or book a free consultation online.

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This article was previously published on Tilney prior to the launch of Evelyn Partners.