Working with clients who’ve had catastrophic injuries is the most compelling part of financial planning I have been involved in. It presents questions and challenges that require sensitive understanding of someone’s medical condition, treatment, therapy and care as well as an ability to link those things to their actual or probable cost of provision, and structuring funds that will pay for them. It’s an area I’ve focused on for nearly two decades.

There are particular kinds of personal finance issues that arise for these exceptional clients which not only demonstrate the importance of creating a robust financial plan and an income strategy that will stand the test of time. They’re also prime examples of how important it is to establish and maintain a trusted working relationship with these individuals, their family members, and other professionals who are involved, to ensure that the plan continually meets its objectives year after year.

A well-constructed plan tailored specifically to a client’s requirements combines both quantitative and qualitative elements of their individual situation.

The first consideration in any plan is often the funding of those capital costs that are needed to establish our client’s position. Money may be needed to adapt or purchase a property, procure equipment, or meet further medical costs in the near future.

But thereafter the focus turns to identifying the personal cost of living. Some costs, even everyday ones such as heating, increase as a result of an injury. It’s also important to budget – where possible – for Personal Support, such as case managers who help to identify care regimes, therapies, and special equipment designed to enhance our clients’ quality of life.

I consider this to be the numbers part of the equation – the “how much do I need?” question.

But the “how much do I need?” question then demands the “how do I generate it?” question.

For many clients there may be different sources of income to be aware of and account for – state benefits, income replacement strategies, guaranteed regular payments resulting from the accident, and future income streams. These may go some, if not all, of the way to securing funds covering the cost of living.
However there may well be – and probably should be – another accessible source of funds to help to meet any shortfall in regular costs, any identified future capital costs, and any “unknown unknowns”.

In this situation a guiding principle could be “how much do I need, how long do I need it for, and what is the least amount of risk I need to take to deliver that return?” The combination of need and risk will help to determine the structure of the financial plan which can then be fine tuned to ensure tax and cost efficiency.

This can help us identify our initial course of action, but each year it is important to check that we are still on the right track. This is why our ongoing relationship is so crucial. I want to know how the client is faring, and how they and their family feel about the support they’re receiving. I can ask all the relevant questions such as: has the client’s situation changed or have any new expenses arisen? Are the costs weighted any differently now than they used to be? At the same time as checking the ongoing affordability of the living and care arrangements, it’s important for me to confirm that the investments continue to be suitable. Are the investments still tax efficient and generating the anticipated results? How will the picture look next year, or in a few more years? To help answer these questions, I’ve found that the sensible use of cash-flow planning acts as a ‘financial sat-nav’ which allows us to see the trajectory and, where necessary, alter the route to take account of any personal, taxation or market changes.

These periodic ‘tweaks’ to the financial plan are what help to sustain it over time. They allow us to aim for the best possible results for any and all of our clients. But for our exceptional clients who are living with injuries and undergoing special treatment and care, the added safety and security that’s brought about by careful personalised review of their finances is irreplaceable.

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