At Matrix Capital, we have dealt with more than 100 jackpot winners over the last 10 years; and have helped many to achieve great outcomes through careful professional financial planning. However, we have also witnessed a number of extremely poor outcomes where they haven’t taken professional advice from us or another similarly suitably qualified firm of advisers.
Here are some of the common pitfalls:
Giving up their anonymity by telling people, often during the initial period of euphoria without thinking of the consequences.
Making unwise investments instead of putting the money in a safe place while they take professional advice and allowing the initial euphoria that can lead to decisions based upon emotion rather than logic.
Not seeking professional advice or taking advice from advisers who are not suitably qualified and lack relevant experience; or even worse, relying upon ‘advice’ from an unqualified friend, relative or colleague.
Where they do take advice, the advisers operate in silos without collaborating, leading to missed opportunities or decisions that cannot later be reversed if they subsequently discover a more suitable approach.
Promising to make gifts and later regretting the decision, possibly leading to a breakdown in relationships or a poor outcome for the winner.
Buying assets that are expensive to own and using their capital to fund the ownership, leading to their capital being eroded and, sometimes, exhausted leaving an asset they can no longer afford to keep.
Funding business start-ups they have no knowledge or experience of, resulting in failure and loss of their capital.
Posting their news on social media and exposing themselves to the risk of scams, fraud and unwanted approaches.
Providing a safe pair of hands for clients who experience sudden wealth is much more than cashflow forecasts and setting up investments, pensions, and trusts. It also often means having a heightened awareness of vulnerabilities and how to handle them to ensure the client achieves good quality outcomes.
Sudden wealth is not just brought about winning a large prize. It can, for example, include a large personal injury claim, an unexpectedly large inheritance, or the sale of a business.
We are very proud of the work that our team does at Matrix Capital – we have built up a significant level of technical knowledge, expertise and experience that enables us to provide a safe pair of hands for people experiencing sudden wealth.
All of these pitfalls and many more can be avoided with a team such as ours, providing a safe pair of hands right from outset when you first receive the news.