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Helping clients retire during uncertain times

Nick Longo, ADFP

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How I designed an alternate strategy to allow my client to retire amid an economic slowdown.

A good client of mine referred his colleague, who was looking to retire mid-2021. He’s a shareholder in a private engineering company and had planned to retain the shares, which would provide an annual dividend payment to help cover the cost of retirement for him and his wife. The engineering company he partly owns tenders major government projects, making it their main client. And while the business is sound and capable of great success in the future, the COVID-19 crisis has slowed government spending in their business, and projects have been postponed. As such, the client’s shareholdings would reduce significantly.

Regardless, his main goal was still to retire in 2021 so he and his wife could enjoy their golden years while they still have their health. But they were both concerned about the impact the business slowdown would have on their quality of retirement.

When there’s not an easy solution, alternative strategies demonstrate our expertise as advisors and the value we can add to a situation. They are a powerful tool, as they allow you to explore solutions and consider opportunities, or assist with risk management.

In this situation, we forecasted cash flow and budget requirements for both the short and long term based on the ideal retirement lifestyle the clients wanted. We also made accommodations for their children to be left with assets as part of their estate plan.

We involved the clients in building and designing alternate strategies amid the pandemic, which has so many variables and unknowns to it.

The alternative strategy became the solution in the end. We decided that the client would sell half of his shareholdings in the company now and retain the other half to provide dividend income in retirement. The company still maintained a high valuation, and the proceeds from the shares sold would be managed by my practice to ensure the delivery of a regular income stream. This hedging strategy allowed them to realize some of the capital growth of the business by selling some shares while also benefiting from future income when the company’s projects recommence.

Strategy demonstrates value to clients. In this case, the clients originally thought their asset base and retirement would be compromised, but we proved that, through designing alternative strategies, we could provide the solution to deliver the security they needed.

Nick Longo is a four-year MDRT member from Richmond, Victoria, Australia. Contact him at


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