Wyeth Client Case Study: Helping Frank Secure His Retirement

Planning for retirement is one of the most significant financial steps a person can take. It requires careful strategy, informed decision-making, and the right investment guidance to ensure financial security in later years. A well-structured financial plan can mean the difference between uncertainty and confidence when transitioning into retirement. This case study highlights how FJ Hanly & Associates assisted Frank (not his real name), a former Wyeth employee, in successfully managing his pension transfer and securing his financial future.

Background: Frank’s Retirement Transition

Frank took the redundancy package from Wyeth in 2021 when he was 62 years old. At that time, he faced a critical decision about how best to manage his pension funds to provide financial stability for his retirement years. With a transfer value of €610,000, he opted to invest this amount in a Pension Bond instead of immediately maturing the funds. His rationale was straightforward, he wanted to defer taking his lump sum until he turned 65, allowing for further potential growth while maintaining flexibility.

This decision was an important one, as it meant that Frank needed expert guidance to ensure his funds were placed in a secure, well-managed investment portfolio. He sought out the expertise of FJ Hanly & Associates, who took the time to understand his financial objectives, retirement goals, and overall attitude towards investment risk. This careful approach was crucial in developing a financial plan that would not only safeguard his pension but also optimise its growth potential over the coming years.

Strategic Investment Planning: Medium Risk Portfolio.

When Frank’s transfer value became available from Mercers in February 2022, FJ Hanly & Associates began constructing a tailored investment portfolio that aligned with his financial goals. We conducted a thorough assessment of his risk tolerance and determined that Frank was most comfortable with a medium-risk investment strategy. On a risk scale of 1 to 7, with 1 being the most conservative and 7 being the highest risk, Frank was placed at level 4. This level of risk meant that his investment portfolio needed to strike a balance between growth potential and capital preservation.

To achieve this balance, FJ Hanly & Associates designed a portfolio where 50% of his funds were invested in high risk assets.  These high risk investment assets are generally the key driver of investment growth, offering higher potential returns over the long term. However, as they can be volatile, they needed to be counterbalanced with more stable investments. The remaining 50% of the portfolio was allocated to lower-risk or defensive assets such as government bonds and cash reserves. These investments provided a buffer against market fluctuations and ensured that a portion of Frank’s funds remained secure, even in times of economic downturn.

The selection of investment funds was another critical element of the strategy. FJ Hanly & Associates partnered with some of the most renowned and talented fund managers in the industry; professionals with a long history of successfully managing clients’ investments. The team carefully analysed historical performance data, market trends, and economic forecasts to ensure that Frank’s portfolio was positioned for optimal performance while staying within his comfort level.

Growth and Portfolio Performance

Over the course of three years, Frank’s investment portfolio demonstrated strong growth, increasing from €610,000 to €700,000. This growth was a result of a well-balanced investment strategy that combined steady returns from lower-risk assets with the more aggressive growth potential of shares.

Throughout this period, FJ Hanly & Associates closely monitored market conditions and conducted periodic reviews to ensure that Frank’s portfolio remained aligned with his objectives. These reviews allowed them to make adjustments where necessary, ensuring that his investments continued to perform well while mitigating unnecessary risks. Their proactive management approach played a crucial role in achieving a positive outcome for Frank, giving him confidence that his pension funds were being well taken care of.

When Frank reached the age of 65, he made the decision to mature his pension. At this stage, he was entitled to withdraw 25% of the current value of his pension as a tax-free lump sum. Given that his portfolio had grown to €700,000, this meant that he could now access a lump sum of €175,000. This was a significant financial milestone for Frank, as it provided him with immediate liquidity while still preserving the majority of his pension for future investment.

With the remaining balance of €525,000, Frank chose to invest in an Approved Retirement Fund (ARF). This decision allowed him to maintain control over his pension while continuing to benefit from investment growth. The ARF structure provided flexibility, enabling Frank to draw down an income as needed while keeping his capital invested for the long term.

Next Steps: Transitioning to an ARF

As Frank moved into this next stage of his retirement planning, FJ Hanly & Associates guided him through the process of establishing his ARF. This involved in-depth discussions about his investment preferences, income requirements, and long-term financial security. One of the primary considerations was how much income he wished to withdraw annually from his ARF. Striking the right balance was essential, as withdrawing too much too soon could deplete his funds, while withdrawing too little might limit his financial freedom in retirement.

Risk management remained a key factor in the construction of Frank’s ARF portfolio. While he had previously been comfortable with a medium-risk investment approach, his risk appetite at this stage of retirement needed careful reassessment. FJ Hanly & Associates worked closely with him to evaluate market conditions and determine the best asset allocation strategy for his ARF. Our experience and expertise built up over 30 years gives us the know how to get the best out of ARF’s like using certain assets for diversification, taking income from low risk assets in the early years and using the best active fund managers with the best track records to deliver better returns for our ARF holders and other investors. This ensured that we get the best possible returns for Frank and Franks ARF

 remained aligned with his evolving financial needs and goals.

At this stage, FJ Hanly & Associates also took on the responsibility of managing Frank’s ARF on an ongoing basis. This involved providing regular updates, conducting periodic portfolio reviews, and ensuring that his investments continued to perform optimally. Their commitment to continuous monitoring and adjustment meant that Frank could enjoy his retirement years without the stress of managing his finances alone.

Frank’s Testimonial

Frank expressed his satisfaction with the service he received from FJ Hanly & Associates, stating:

“We are delighted to have Fergus of FJ Hanly & Associates looking after these pension monies since I left Wyeth. It is a huge weight off our shoulders to know these funds are well managed and in safe hands. I am delighted with the service, the investment returns, the guidance, and the comfort of having Fergus, founder of  FJ Hanly & Associates take care of this important asset for my wife and me.”

Conclusion

Frank’s journey highlights the importance of strategic pension planning and expert financial management. With the right guidance, informed investment decisions, and ongoing support, individuals can confidently navigate their retirement years, ensuring financial stability and peace of mind for the future.

At FJ Hanly & Associates, we are committed to helping clients like Frank achieve their retirement goals through customised investment strategies and unwavering personal support. If you are approaching retirement and looking for expert financial advice, contact us today to start planning for a secure future.