Page 5 - PIC-Magazine-Issue-26

PERIODICAL
PAYMENT ORDERS
Vs
LUMP SUM
SETTLEMENTS
Is One Better
Than The Other?
hat is crucially important to remember is
that there is no such thing as a “one size
fi ts all” approach. Every client is diff erent
and therefore every approach needs to be
diff erent. As fi nancial advisers, we are often
asked the question, “do you think a PPO or Lump
sum settlement is best?” Although I may have an
instinct of what could be better for the client thanks
to the experience I’ve gained over the years, it would
be remiss of me to suggest either option without
undertaking a full analysis. That analysis involves using
complex cashfl ow modelling tools together with
detailed mathematics to see what levels of risk are
involved for the client and what both options are able
to provide the client longer term.
As someone who deals with vulnerable individuals every
day, I’m passionate about ensuring that every settlement
is right for each of my clients because I’ve spent my
career understanding what vulnerable clients need.
Our clients often come to us from a place of trauma,
recovering from a life-changing injury. It’s my job both to
support their solicitor achieve an appropriate settlement,
and to give them as much support and reassurance whilst
they navigate their post settlement chapter in life, helping
them understand how the settlement can work for them
and what life could look like for them and their family.
A PPO can provide certainty and help clients feel secure
that these costs are future proofed at the conclusion of
their claim. In many cases, claimants might need to factor
in care and case management costs, a change or even
an end to their career and potentially Deputyship costs.
The security, tax and risk free nature of a PPO could
off er huge reassurance, in particular if these costs are
running at a high level or when considering uncertainty
surrounding life expectancy.
On the other hand, there are clients that feel strongly
about wanting a clean break from the defendant –
a PPO can’t provide that, but a lump sum can, and it’s
vital that we take client preference into consideration
when making recommendations.
I’m always happy to have discussions with the client at
the right stage in their case and support a solicitor when
talking to their clients in order to explain what either
position could look like after settlement. My support can
also take the form of an analysis report of the settlement
for solicitors ahead of Joint Settlement Meetings (JSMs)
so they can walk in with a strong argument to help
secure the best outcome for their client. I am often
found attending JSMs in person together with my laptop
and analysis tools, to off er my guidance and expertise as
off ers are coming in from the other side, in order to help
support the instructing solicitor and counsel determine
whether those off ers are right for the client, ahead of
agreeing and fi nalising settlement.
There is no ‘one size fi ts all’ solution.
Every client’s circumstances are diff erent,
so I would never recommend a PPO or a
lump sum without detailed fi nancial
analysis. The right outcome is the
analysis. The right outcome is the
one that balances risk, security
one that balances risk, security
and personal preference,
and personal preference,
and above all, supports
and above all, supports
the client’s long-term future.
the client’s long-term future.
frenkeltopping.co.uk
Elen Davies-Kay
BSc (Hons), APFS
If you have a case that you’d like to discuss with one of our experts,
contact the team via email; enquiries@frenkeltopping.co.uk
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