17 Mar It's Never Just About The Money
I was in the office recently and had a fascinating meeting with one of my favourite clients (fellow Liverpool FC supporter 😊).
Karen* had emailed me a couple of weeks earlier to request a ‘general chat’ with me while I was in the office. She is a senior partner in one of the ‘big four’ accountancy firms and when we met with her and her husband for their annual review meeting, last November, we had discussed her moving to the firm’s ‘glide path’ to retirement. This happens at around two years before age 55 – the age at which the firm likes partners to stop work.
We didn’t know at that stage what the firm would offer her in terms of the last two years – whether she would remain a full equity partner and therefore what impact that might have on her last couple of years’ earnings. After some discussion we agreed to base their financial plan on the assumption that she would earn 50% of current profit share, equating to around £500,000, for one more year, then consultancy fees of £70,000 per annum. On this basis, their plan worked, and they could afford for Karen to reduce her workload and afford the cost of their goals. Result 😊
When Karen arrived, she apologised for what she called her ‘monkey brain’. She said she’d met with her boss and they had agreed that she will continue for two more years as an equity partner, with only a small reduction in equity, so a higher profit share than we had assumed in their plan – and for two years rather than one. After that, they would love to have her stay on, on a consultancy basis, on what they term a ‘zero-hours contract’. What this means in practice is that both she – and they – can choose the hours she works (with Karen having the ability to say no if the hours are more than she wants to work). Karen could keep some of her favourite clients and continue mentoring junior members of her team, an aspect of her job that she loves.
Well, to me, that sounded like a ‘win, win’. The remuneration package was much better than we’d assumed in their plan, Karen would have complete freedom after two years to choose how much she worked and would finally have the free time to do all the other things in life she loves doing and she’s worked so hard to earn the right to that free time.
The rational side of Karen’s brain knew this too. She knows the plan says they’ll be okay with about £1m less than she will actually receive over the next two years. She also knows that with her experience and specific expertise in her field, she’ll earn £70k a year from consultancy work even if she didn’t work a single hour more with her firm. She didn’t need me to go over that ground again.
What Karen needed was a bit of emotional support. Recognition that what she is going through is perfectly normal. I was able to relate several instances of clients who have been in exactly the same position as her and have made that transition from working to either winding down or stopping work altogether. I was able to share with her what they had shared with me – how hard the adjustment was even though they too knew they were fine, financially. The dealing with a loss of ‘status’, even though none of them had big egos 😉. That fear when the safety net of a regular pay cheque stops, irrational though it might be. And, I was able to reassure her that while all of those clients had told me it took them far longer to adjust than they ever thought it would, they HAD all successfully made the transition and were loving their financial independence.
What Karen needed from me right then was someone with no emotional involvement in her situation. Someone who had the time and was happy to listen to her and acknowledge that her fears are completely natural. To tell her she’s not mad. And that in my experience, everyone goes through this is some way, shape or form, and comes out the other end much happier.
I was also able to share details with her of a retirement counselling specialist one of our clients currently going through the same process had recommended to us.
I absolutely LOVE this part of my job. I feel so privileged that clients would even think of talking to me about these massive life changes. I never, ever, take for granted the trust that they place in us. We are so lucky to be doing the work we do.
It was a great meeting, lots of laughter and a happy client who found the chat helpful.
That’s a value add it’s hard to put a price on, isn’t it?
*Name and some details have been changed to protect our client’s anonymity