MoneyTalk January (Second Issue) 2005

by Arch Financial Planning Limited

KEY PERSON ASSURANCE

This issue of MoneyTalk is aimed at those of you who are directors or partners in small and medium sized companies or firms. If this does not apply to you then you will not miss out on anything if you simply delete this now and look forward to the next issue of MoneyTalk.

You are probably already aware from past experience that it is not easy to replace key people at short notice. Consider an example from a very much larger and highly successful organisation. Standard Life, Europe’s biggest mutual life assurer, announced on 4 January 2005 that it might not be able to appoint a finance director with public company experience until the summer. That would be 12 months after the group said it had instructed head hunters to seek such a person to help prepare for demutualisation in 2006.

This is all the more incredible when you realise that Standard Life has been an efficient and highly successful money manager for more than 175 years and currently has over 5 million customers. In fact Standard Life’s assets under management are worth more than the market value of Sainsbury’s, Boots, Tesco, Cadbury Schweppes and Marks & Spencer combined. City analysts believe it is vitally important that a heavyweight financial outsider comes in and declares that Standard Life is indeed ready to be listed. Even in very much smaller organisations key people are the most difficult and costly business asset to replace quickly.

You, or your bank, may have realised that one or more of your directors or senior staff are such key people that their untimely death or disability could have a devastating effect on the profits of the company.

By insuring the life of a key person against premature death or disability you can safeguard the business against the loss of profits and provide a breathing space during which time the company can be restructured, or a suitable replacement found. Key person assurance aims to ensure the continuation of a business by financially compensating a company for the death or disability of one or more of their key employees.

We have produced a new Fact Sheet: Key Person Assurance. If you would like to print-off a copy or read about this important subject further, please visit our website www.arch-fp.co.uk/key_person_assurance.htm.

If you would like to discuss whether key person assurance might be appropriate for your company or firm and you have an Arch adviser then please contact him or her, otherwise email direct@arch-fp.co.uk or telephone 01483 204600.

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Arch Financial Planning Limited

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