Kevin and Kate – When You Should Touch Clients With More Than a Barge Pole!

I will never forget that moment!  It’s as if it happened just yesterday….

What am I talking about?  Let me tell you.

Many years ago back in January 1990, I was working for a high-sales insurance company.  If you know me, you’ll understand when I tell you that I was definitely a square peg in a round hole.  It was awful.  The type of company that prided itself on making sales rather than actually really helping people. On Fridays, senior management would gather everyone into a meeting room and cheer the people who’d sold the most policies, standing them on the meeting table for everyone to clap. It wasn’t me at all.  During the two years that I had to tolerate working there I never got to stand on that table!

The Right to Buy

One of their “salesy” ideas was to get cards printed for all of the staff to go out onto the streets of Birmingham and give them out, for a “free” draw.  The cards had a secondary purpose.  They captured people’s names and phone numbers so that we could call them later and arrange an appointment. That was how I met Kevin and Kate.

While I was on the streets, I got into a conversation with the couple and found out they wanted to own their council house – effectively to exercise their right to buy.  Of course, when I got back to the office, my manager bawled me out and “ordered” me not to deal with them, but me being me wanted to help them (and I knew I could). So I made my own arrangements to see them one evening and had a cup of tea amongst lots of cigarette smoke – something that unfortunately came back to haunt them later on in life.

Kevin and Kate lived on a typical council housing estate, similar to the house where I grew up in South Wales, so I felt perfectly at home and I didn’t react by the interjection of the sanguinary epithet in almost every other word!

I wrote down all of their information in detail – no “back of a fag packet” for me, and while my manager always complimented me for my detailed fact-finding, he still always reprimanded me for taking too long with clients and not making enough sales.

Clearing CCJs

During fact-finding, it turned out that arranging a mortgage for the couple wasn’t going to be a piece of cake – because they had a chequered credit history with county court judgements (CCJs).  It took a year to clear those before I could arrange a good mortgage for them but the positive piece of information here is not only the clearance of their CCJs, but they did get to buy their own house.

That was all great – but I had to explain it to my manager!  The best thing I could do to satisfy him was to contract the couple out of SERPS (the stat earnings-related pension scheme) for which my manager tried to belittle me to the rest of the sales’ team.  Such were the ways of the time – certainly at that insurance company.

So – you might be thinking what did I get out of this (apart from an ear-bashing from my manager)?  I got the deep satisfaction of knowing that I had helped nice people achieve their dreams of owning their own home, something the couple never thought would be possible to do.

The experience was a bit of a catalyst for me.  It made me even more determined to focus on clients’ dreams, rather than focusing on selling them a product that paid me a high commission!

Buying a New Home and Moving Onwards and Upwards!

A few years later, Kevin and Kate returned to me because they’d decided to sell their home and move away from the council estate to a more private road, just a few miles away.  By that time, I was a fully-fledged Independent Financial Advisor, and I arranged a new mortgage for them, ensuring they were both covered by critical illness insurance.  For the first time in their lives, the couple were debt-free, and they became net investors by saving into regular savings PEPs (Personal Equity Plans).  This was the time when mortgage endowments were being pushed heavily because they paid out huge commission – but that wasn’t my way.

My way was (and still is) to put clients first – and I earned about enough commission to keep my old car running!

Wills and Property Insurance

One of the other important things I’d been doing as an IFA was preparing my clients’ wills.  So, I made sure that Kevin and Kate had theirs in place, along with property insurance (unlike other advisors who used to ignore this type of insurance).  That property insurance has been in place for over 30 years now.

A Life-Changing Illness

Unfortunately, just five years later, Kate developed breast cancer.  I was called in to claim on their insurance and clear their mortgage.  Thankfully, Kate made a good recovery and the real positive (apart from her recovery) was that within just ten years of meeting me out on the streets in Birmingham’s city centre, the couple owned their own home, they had no mortgage and no debt.  So what was next?  I’ll tell you!

Kate’s illness had made the couple think about life and they decided they wanted to enjoy it to the full as much as possible.  They wanted to use some of their investments to take a few “damned good holidays” and receiving their postcards from their travels always gave me a great, warm feeling.

A Lump Sum from a SIPP

As I mentioned earlier, both Kevin and Kate were heavy smokers.  After Kate’s illness, she managed to give up the habit, but Kevin found it too hard.  He told me that he’d smoked since he was ten years old and couldn’t quit.  Sadly, he developed lung cancer and he died too young but before he did, he took advantage of the SERPS plan that I’d put into place for them.  I’d converted it to a SIPP so Kevin could take out the tax-free cash and enjoy one last holiday by the sea.  The rest of his pension fund passed to Kate on his death who decided to leave it in drawdown and take a regular income from it.  Had I not contracted Kevin out, the lump sum wouldn’t have been available, and the income wouldn’t have been paid to Kate on his death.

After 30 years, Kate is not only my client, but also my friend.  I’m even helping her children with their financial planning, after all, where else would they go?

So – I’m glad I left that barge pole at home – and I hope my old manager reads this story!