Georgia Interviews...Nicola Downs
This month, Georgia Interviews...Director of
independent financial advisers Trentham Invest, Nicola Downs, on her book about
demystifying final salary pension schemes, and why she felt it was so important
to share her knowledge with the wider world in a book format,
specifically.
You can watch the 11 minute interview
in full in the video above, or read the edited write up below.
Georgia:
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Hi Nicola. Thank you so much for
joining me today. I'm really excited to be talking with you about your book.
Just say hello to everyone and start by giving us all a little bit of an overview
of who you are and your business, Trentham Invest, and we'll go from
there.
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Nicola:
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Hello, Georgia. Very
nice to meet you too. Trentham Invest is based in the Mole Valley in Dorking.
It was started 13 years ago. Because we're in the Mole Valley, I wanted
something that was synonymous with the local community. We're really known
for our brand in terms of a mole. That's who we are. We've developed that and
we're better known now for geese within our business.
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Georgia:
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Fantastic. Thank you. I love the
fact that because of where you're based, and how you're bringing the
countryside and the community that you live in into your branding. It's
really clever. So you've recently written a book. Do you mind telling us,
first of all, what it's called and what it's about?
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Nicola:
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The mole has developed and morphed into a goose. The reason
for that is we have started specialising in pension schemes. With that, we've
really drilled into a particular type of pension out of the number of
pensions available in the UK and those types are final salary pension
schemes. Listening to people over the years with the issues and problems, I
was motivated and excited to write a book about the myths of final salary
pensions and the options that people have.
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Georgia:
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That's amazing.
Did you feel that was something, information, people didn't really have
access to before?
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Nicola:
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Yes. What inspired me was a particular experience, where I was
the retirement or pension adviser specialist to this man, and his planning
for his retirement. When he actually came to retirement, he was a member of a
final salary pension scheme, but because he wouldn't have had the full
40-year service, he wanted to make additional voluntary contributions. He had
a pot that was £800,000. He wanted to retire just after the age of 55, maybe
approaching 56, and had gone to the pension trustees about his options for
the pot. They went to Hargreaves Lansdown. They then got an illustration for
him, gave him the illustration and the quotation. He had a look at that and
thought, I'm only getting 2.5% return on my capital. In the event of my
death, my wife will get half of that. That really wasn't good enough for him.
He came to me and said, "You're the expert. You can do better." He
showed me the illustration. I looked at that and I said, "I'm really
going to disappoint you because the system that Hargreaves Lansdown would use
was exactly the same research system as what we would use, and I couldn't do
any better." So, faced with that problem, he then said, "But you're
the expert. Surely, there's something else you can do." I immediately
said, "What is it that you want?”, and he wanted maximum income for him,
maximum protection for his wife, particularly in the event of his death, and
flexibility of the money if anything happened. I said was that it, he said
yes, and so told him there were two options. This was in 2007-2008. At this
point, occupational drawdown had come into play. Personal drawdown has been
around since 1995, but he needed occupational drawdown to achieve what he
wanted to do. So I said, "We'll go to the trustees and ask them if they
will allow this £800,000 to go into occupational drawdown." If that was
the case, I could double his income. If they said no, which they were
entitled to do, I said, "There's the nuclear option. In which case, we
will sever everything from that scheme, including the final salary section,
into a private arrangement." At that time, I said, "That's the
nuclear option." He said, "How much could we get for the nuclear
option?" I said, "About £1.2 million." We went to the
trustees. They would not allow him into occupational drawdown. They wouldn't
rewrite the rules. I had suggested they do that and gave them the words to do
it. I've done that with another scheme a year earlier, when 2006 came in, but
there was no way they were playing ball. I said, "Look, we need to go
nuclear or even consider that," and the valuation came in at £1.7
million. I did a few calculations, I opened a spreadsheet, did some
forecasting. It really was a no-brainer, and off we went.
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Georgia:
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That's amazing.
Those kinds of results, the way that you help these people, that's
life-changing, isn't it, for him? Not just for him, but for his family and in
terms of future planning. I just find it amazing that death is the only
inevitable thing for all of us, but there must be so many people in his
position who aren't able to maximise their situation. What I'm really intrigued
to know is, what made you decide that writing for these people and putting
all of this in a book was the most effective way to reach them and to help
them with this information?
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Nicola:
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As you say, it's
life-changing. It was life-changing for him and his family, which is pleasing
for me. I get a lot of joy from helping people make life-changing decisions.
Putting this into a book, I wanted to reach a wider audience. I can speak to
one person face-to-face, but by writing it down, my message gets to one to
many, and putting real cases in there was really important to me. I've worked
with a number of people since that early encounter, where the lifechanging
transformations really are around increased tax-free lump sums. For that case
I mentioned, he had an extra £100,000 tax-free cash sum. His pension income
almost doubled for retirement. Instead of his wife getting just over £20,000
a year in the event of his death, she would get well over £1 million, maybe
£1.3 million.
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Georgia:
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Unbelievable.
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Nicola:
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The issue is that people
don't hear about this because the trustees aren't allowed to communicate
these messages. They say to people you've got to go and get financial advice.
They go and get financial advice. They go to an adviser, but most advisers look
at a computer report. Those computer reports look at annuity purchase. People
don't want to buy annuities in this day and age. They want drawdown. They
want alternative options. If somebody wants to come out of a final salary
scheme and buy an annuity, I would not transfer them out because that's what
this man faced with his £800,000 pension pot, was buying an annuity. The old
computer reports, we still have to do it for compliance. We have to do it for
the regulator, but it's not what the people want. We have designed a unique
method and a unique process to take people through alternative
decision-making. We clearly do the compliance reporting as well, but we look
at it from a different angle. Empower the people with different options and a
system with freeing the geese. We are directly authorised with the regulator.
We take responsibility. We put the client at the centre of the
decision-making and not a computer report, unlike a lot of financial
advisers.
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Georgia:
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What's really evident
in speaking with you is how you're combining your expertise with a very clear
passion for helping people and for what you do. I'm sure there are a lot of
people out there who would read your book and be very grateful that you've
combined the two and actually made the effort to reach that wider audience
and communicate the core of who you are. How do you feel communicating your
values and your core message has benefited your business?
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Nicola:
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I think people have been
given a certain message. The beliefs are that final salary pension schemes
are gold-plated. You can't lose. It's a guarantee. Why would you do it?
There's nothing else better than a final salary pension scheme. There are no
risks. Actually, there are risks in these schemes. They're gold-plated -
they're not solid gold. The plate has fallen off a lot of these schemes.
Inside, they're corroded. The holes are enormous. Maybe 50% of the pension
isn't there, and people are not aware of this. I really wanted to educate,
empower, and demystify all these myths that people have been brainwashed to
believe.
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Georgia:
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Absolutely. For
people listening to this who have been or are being impacted, anybody who
hears what Nicola's saying and it's resonating, can you tell them what your book
is called and where they can find it?
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Nicola:
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The book is called Your
Final Salary Pension Options: The Truth Behind the Myth. You can find it on
Kindle, and you can find it on Amazon or you can contact our office directly,
and we'll send you a hard copy.
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Georgia:
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That's fantastic.
Thank you so much for taking the time to share all of that. I hope that you
all go out and buy a copy of this book. I've read it. It's fantastic. It's
informative. It's information you really can't get anywhere else. Thank you,
Nicola.
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Nicola:
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Thank you.
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