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An Investment Challenge

After successfully setting up Architectural Aluminium & Glass Ltd with directors Del and Jay Wilson, Claire Wilson wanted to explore alternative investment options for the business. AAAG had created a small self-administered scheme, a type of pension scheme. Using some of the pension funds from the scheme in the form of a loan, the business was able to obtain necessary funds to invest in plant machinery and infrastructure to develop the business further. Claire asked Absolute Wealth Management to review investment options open to them as they paid back the loan to the pension scheme. 

Upon conducting a financial review of the business, it became apparent that the business had no financial protection should any of the directors lose their life or suffer a critical illness. 

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Our Solution

Having no financial protection can mean that surviving business owners could lose control of a proportion or the whole business, should a family member who has inherited the shares, wish to get involved in the business or sell their share in the business to a third party. We recommended that the directors of AAAG put share protection policies in place. Then, in the event of one of them dying, share protection would provide a lump sum to the remaining business owners. This lump sum could then be used to purchase the deceased director’s shareholding in the business, thereby protecting the remaining directors from losing control.

In addition, we showed Del and Jay how to maximise the investments made from contributions back into the scheme, by forming a balanced portfolio within the pension scheme, but also making sure that there was money available should another loan be required at a later date.

Finally, we suggested each director take out business loan protection which would provide the business with a lump sum cash injection to pay off the pension loan should one of the directors die. This additional measure would ensure that the company would not have to find additional funds to repay the loan.



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Result

Claire was delighted that she could find an alternative way of investing in and protecting the business. Not only have we provided AAAG with financial stability, should unforeseen events occur to any of the company directors, we have helped secure a future for the business.  

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41 North View,

Westbury Park,

Bristol BS6 7PY

0117 907 1965

info@absolutewm.co.uk