Local financial adviser saves widowed mum $80,000 from mistakes made by large financial institution

The Farm Protectors - Widowed saved

Local financial adviser saves widowed mum $80,000 from mistakes made by large financial institution

After the loss of your husband and the father of your children, the last thing you need to worry about is your financial situation.

What many people don’t realise about having the ‘right’ financial adviser is that not only can we help save you from financial hardship but we are there on your side at the time you need us the most.

A colleague within the financial services  industry shared this story with us.

A client passed away leaving a wife and two young children. Luckily he had a $2,000,000 life insurance policy inside his superannuation. Based on the policy there was to be a lump sum payment to his wife and death benefit pensions payable to his wife and children.

Prior to his death, the beneficiary nominations had lapsed, meaning that instead of his preferences, the payments were at the ‘Trustee’s discretion’

Through his advisor, the client had provided very specific beneficiary allocations to ensure this family was looked after in the best income and tax positions.

It could be assumed that the trustees would have contacted either the widow or advisor, however this wasn’t done.  The trustees were ready to transfer the full amount – the superannuation fund balance and life insurance proceeds – as a lump sum to the widow.

When the advisor found out, he quickly asked them to put it on hold and provided them with all the paperwork outlining his client’s requests.

The trustees dismissed the requests until the advisor sent a strongly-worded email outlining among other things: both the client and his widow had requested certain allocations, the institution had been selected as they were ‘market leaders’ in estate planning and paying a lump sum to the widow would immediately end her relationship with the institution as her main banking was done with one of their competitors.

After some back and forth between the advisor and the institution, the client’s requests were finally fulfilled.

The story doesn’t end there though! The first pension payments made to the beneficiaries had an amount deducted from them for tax. Another error by the big institution. The advisor again notified the trustees they had made an error and asked them to fix it. In typical fashion, the big institution said it would need to ‘consult their legal department’. Soon after they called the adviser to apologise and the beneficiaries were reimbursed.

How much income could have been lost? We know the advisor saved this family at least $80,000 in tax. But how many others without a caring adviser are losing out through the remoteness and uncaring attitude of big institutions?

This situation would have been very different if there wasn’t an adviser who actually cared about his clients.

The true value of an adviser isn’t always immediately clear. If you have to go through the unthinkable, then it’s nice to know that you have someone in your court, someone on your side. But for many, the big banks and insurance companies aren’t.

Leave a Reply

Your email address will not be published. Required fields are marked *