Helping other people is a significant part of financial planning, but it is often approached too narrowly. A client says that they want to give money to their children, help with a house purchase, pay school fees, support an elderly relative or pass wealth to the next generation, and the conversation can move remarkably quickly towards affordability, tax allowances, trusts or estate planning. Those issues matter, but they come later. Before considering how somebody should provide financial help, we need to understand what they are actually trying to achieve.
That is the purpose of Map 3: Helping Others. It brings the people a client wants to support into the planning process and explores the intentions, relationships and consequences behind that support. Helping others is not simply a transaction to be accommodated within a financial plan. For many clients it is part of what their wealth is for, and it therefore deserves the same attention as their own retirement, lifestyle and long-term security.
The starting point is to understand who matters to the client and what they would like to make possible for those people. That may include:
helping children or grandchildren with education, housing or other opportunities;
supporting family members who are struggling financially;
caring for elderly parents or other dependants;
making provision for somebody who is vulnerable or has additional needs;
helping somebody establish or develop a business;
transferring wealth during the client's lifetime rather than waiting until death; or
supporting charities, communities or causes that are important to them.
These are very different objectives. Treating them all simply as 'gifting' risks losing the reason the money is being transferred in the first place.
A gift of £50,000, for example, tells us very little about the client's real objective. The purpose might be to provide a deposit for a first home, create greater security after a relationship breakdown, reduce financial pressure on a young family or give somebody an opportunity they could not otherwise afford. Once the purpose is understood, the planner can begin to consider whether giving £50,000 is actually the best way of achieving it. There may be other ways of helping that are more appropriate, more sustainable or less likely to create unintended consequences.
This is also where family relationships begin to matter. Providing significant help to one person can affect others, particularly where children or other family members have different circumstances and needs. Clients may want to treat their children equally, but equality and fairness are not necessarily the same thing. One child may need considerable support while another needs very little. Some clients will regard providing different levels of help as entirely fair; others will be uncomfortable unless they can ultimately balance things between family members.
There is no universal answer to this, and there should not be. The planner's role is not to determine what is fair within somebody else's family, but to ensure that the client has considered the implications of the choices they are making. Financial planning can expose these tensions before money is committed, rather than discovering them afterwards when they may be considerably harder to address.
Helping now, later or eventually
Timing is another important part of Map 3. Clients may historically have thought about passing wealth primarily through inheritance, but that does not necessarily mean that death is the most useful point at which their money can benefit somebody else. A child or grandchild may gain far more from assistance with education, housing or establishing a career or business earlier in life than from receiving substantially more money many years later.
Giving earlier, however, has consequences. The client may live much longer than expected, their expenditure may change, care may eventually be required, or their own aspirations may develop. Family circumstances can also change. Relationships break down, people's financial positions alter and recipients do not always make the decisions that the person providing the money anticipated.
Map 3 therefore needs to test several things together:
Purpose: What does the client actually want their help to achieve?
Recipient: Who are they trying to help, and what are that person's circumstances?
Timing: Would the help have greater value now, gradually over time or eventually through the estate?
Affordability: What can the client genuinely provide without undermining their own financial security or other objectives?
Fairness: What could helping one person mean for other people within the family?
Control: Once money has been provided, how much influence does the client expect or need to retain?
Consequences: Could the help create dependency, expectations or other outcomes the client has not considered?
Implementation: Once the intention is clear, what financial, tax, legal or estate-planning work is required to deliver it properly?
These questions deliberately come before the technical solution. They provide the context within which technical advice can subsequently be evaluated.
Helping does not always mean giving money
There is another assumption worth challenging. When a client says that they want to help somebody, financial planners naturally think about financial solutions. Yet transferring money may not always provide the help that the client actually intends.
Someone might benefit more from education, guidance, experience or access to professional advice. A client might decide to meet a particular cost rather than transfer capital outright. Support could be provided progressively rather than through a single payment. In other circumstances, repeatedly providing money may unintentionally perpetuate the problem the client is trying to solve.
This does not mean that the planner should make decisions on the recipient's behalf. It means exploring the objective properly before assuming that a financial transfer is necessarily the solution. The better question is not simply how much does the client want to give?, but what difference do they want their help to make?
Bringing the different pieces together
Helping others can also take a financial plan across several professional disciplines. Depending upon the circumstances, tax, pensions, trusts, wills, estate planning, protection, property ownership or other legal considerations may become relevant. Some situations will require specialist advice.
The financial planner does not need to become the client's lawyer, accountant or tax specialist. There is, however, considerable value in somebody retaining sight of the overall intention and ensuring that the different strands of advice remain connected to it. A technically effective solution is of limited value if somewhere along the way everyone loses sight of what the client was originally trying to accomplish.
That coordinating function is particularly important in family planning because financial decisions rarely exist in isolation. The client's own needs, the recipient's circumstances, the position of other family members and the longer-term estate may all need to be considered together.
Map 3 in practice
Map 3 is therefore much broader than a conversation about gifting. It is concerned with understanding the client's intentions towards other people and incorporating those intentions properly into their financial planning.
It should allow the planner and client to move from a broad statement such as "I'd like to help the children" towards a much clearer understanding of:
who the client wants to help;
why helping them matters;
what the client wants that help to achieve;
when it would make the greatest difference;
how much support is appropriate and sustainable;
what effect it might have on other people;
what risks or unintended consequences need to be considered; and
which financial and professional solutions are appropriate once those questions have been answered.
That distinction matters. The purpose of Map 3 is not to produce more sophisticated ways of giving money away. It is to understand what the client wants their resources to do for the people and causes that matter to them, and then determine how those intentions can sit alongside everything else they want their financial plan to achieve.
In that sense, Helping Others belongs within discovery rather than at the end of the planning process. If supporting other people is an important part of what the client's wealth is ultimately for, we need to understand that before we start deciding what their money should do.