Thankfully, eightfourtwo Wealth Management offer a sweeter alternative, as we’ll soon go on to explain. But let’s start with the problem.
At a time when your client will be looking for certainty, the Duxbury tables are likely to be delivering a series of distasteful surprises.
Yet, even though their limitations are well-known, Duxbury is still the industry-standard for clean-break financial settlements.
Limitations?
The tables assume a uniform total return of 6.75% per annum, while real annualised returns from UK equities have been just 1.80% per annum over the last 20 years. They also still use ONS average life expectancy, when there is now a 25% chance that a 60-year-old woman will live 7 years beyond the estimated figure. And Duxbury makes no allowance for investment costs even though FCA research shows average active fund charges are over 1.30% per annum, not including financial advice.
At eightfourtwo, we offer something a lot fairer and more palatable.
We calculate the appropriate capitalisation taking individual circumstances into account.
We use lifetime cashflow projections including factors such as lifestyle, attitude to risk, realistic market returns, the true cost of investing and potential market volatility.
After everything has been taken into consideration, your clients can then see their entire financial life in a single illustration.
Using our more realistic calculations, a 60-year-old woman with a £100,000 per annum income requirement, and a low tolerance for risk, could need as much as 30% more than Duxbury provides.
And a shortfall like that is sure to be unpleasant to chew on.
Like to know more?
Contact our Team on 020 3861 0842 or at eightfourtwo@integrated-dr.com for more information.
This article was submitted to be published by Integrated Dispute Resolution as part of their advertising agreement with Today’s Family Lawyer. The views expressed in this article are those of the submitter and not those of Today’s Family Lawyer.
