The six moments in a client file
Financial planning conversations start because something changed, and the change is usually visible in work your firm is doing anyway. Here are the six that matter most, and the words to use for each.
Financial planning conversations start because something changed, and the change is usually visible in work your firm is doing anyway. Here are the six that matter most, and the words to use for each.
The balance sheet. A company balance grown every year since 2021 with no purpose stated against it.
The client’s date of birth. Fifty-five, sixty and the year before state pension age each change the options available.
The notes to the accounts. A director’s loan, a bounce-back balance or a mortgage with no protection written against it.
Profit against drawings. Profit rising for three years while the owner takes the same salary and dividend.
What they told you in the meeting. An approach received, or a date in mind. Business asset disposal relief and pension funding both need lead time.
Your own calendar. The one meeting every client gives you every year, already in the diary.
A company balance that has grown every year since 2021 and has no stated purpose. It is the most common of the six and the easiest to spot, because it sits on the balance sheet you are already looking at.
The owner is rarely hoarding it out of strategy. They are hoarding it because taking it out felt expensive, leaving it in felt safe, and nobody ever put the two options side by side on the same page. Meanwhile inflation takes a little each year and nothing in the accounts records the loss.
What to look for: a cash balance materially above what the business needs for working capital, held for more than two years, with no capital expenditure planned against it.
What you can say: “Retained profit has grown again this year. Would it be useful to have someone look at what that surplus should actually be doing?”
Fifty-five, fifty-seven, sixty. The dates change with legislation but the pattern does not: an owner reaches an age at which options open, and nobody has modelled what taking them would mean.
For most owner-managed businesses the company is the retirement plan, and the plan has never been tested. The question is not whether they have enough. It is whether anyone has worked out what enough would be.
What to look for: a director’s date of birth putting them within five years of drawing, in a company with no meaningful employer pension contributions in the last three years.
What you can say: “You are getting to the age where the pension rules start giving you choices. Has anyone mapped out what the numbers look like?”
A charge registered against the company almost always means a personal guarantee, and a personal guarantee almost never means the owner has insured it. If the person who signed it dies, the family inherits the debt along with the business.
This is the one where the gap between the size of the risk and the cost of covering it is widest. Term cover on a guarantee is usually a small monthly figure. The exposure is often the family home.
What to look for: a new charge at Companies House, new bank borrowing in the accounts, or a director’s loan account that has moved sharply.
What you can say: “That new facility will have a personal guarantee behind it. Is there any cover sitting against that?”
Years of steady trading, more staff, more depending on one person, and a personal position that has not moved since the company was small. The business has become more valuable and more fragile at the same time.
What to look for: rising turnover and headcount, one signatory, no succession arrangement, key people with no protection against them.
What you can say: “A lot now depends on you personally. Has anyone looked at what happens to the business, and to the family, if you are not here?”
Real exit planning runs the film backwards. What income does life afterwards need, what must the net proceeds be, what does the deal have to look like, and what needs restructuring now to get there. Started two years out, the same sale funds a visibly different life. Started at heads of terms, most of the options have gone.
What to look for: a buyer approach mentioned in passing, talk of retirement inside three years, questions about Business Asset Disposal Relief, or a company being tidied up.
What you can say: “The planning around a sale works best two or three years out. Shall we get the right people round the table early?”
The most predictable of the six. Once a year the numbers are in front of both of you, the client is thinking about money, and they are expecting a conversation. It is the natural moment to ask the personal question, and the only one of the six you do not have to wait for.
What you can say: “We have covered the company. Can I ask what the plan is for you personally?”
You do not need to run a review to find these. Most firms take an hour, go through the client list against the six, and come out with twenty or thirty names. Client Watch does the same job against the public record for limited companies and returns a ranked list, which is faster but sees less than you do.
Whichever way you get there, the output is the same: a short list of people worth a conversation, and a sentence to open it with.
No cost to your firm, no FCA authorisation, and a named partnership director who sets it up with you.