Good counselling for the redundant

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The Independent Online
TO WIN the competition, Stephen Ward had to advise a fictitious couple.

The husband, 40, has just received a redundancy payment of pounds 40,000 and is starting a landscape gardening business. His wife, 42, is a freelance journalist earning pounds 33,000, with pounds 25,000 saved in building society accounts. They have a daughter, 18, who has started a three-year university course, but does not receive a grant.

Mr Ward advised placing pounds 10,000 in index-linked National Savings certificates and pounds 20,000 in separate zero- preference shares, a low-risk investment because they are the first class of share to be paid out when an investment trust is wound up.

A further pounds 8,000 was earmarked for a three-year capital-protected monthly income to provide the student daughter with a grant. He also advised she take up her cheap student loan, which would not have to be repaid until after graduation. The rest of the money should be kept in interest-paying cheque accounts, he said.

The prize-winning advice is striking because it does not involve clever wheeling and dealing and would not have earned much commission.

Mr Ward said: 'The zero- preference shares would, in some cases, have earned some pounds 600 in commission. In most cases, it would have been nil. The three-year annuity would have paid pounds 176.

'I would have discussed this with the couple first and agreed a fee of pounds 500, with all commission rebated back to the clients. The basis for this was that it related to three years' advice, to the end of their daughter's course.'

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