Last Updated on 07/07/2025 by Carl-Peter Lehmann
The Background: Andrew (primary income earner) and Sarah left behind busy corporate lives in the city and relocated to a tranquil coastal town five years ago. With a significant and relatively complex balance sheet – comprising multiple retirement funds, offshore investments, and local cash – they were looking for more than just investment management. They needed holistic advice that could support their retirement income needs, reduce their long-term tax burden, and position their estate for the next generation.
🧭 Case Study: From City Life to Coastal Simplicity – How We Helped Andrew and Sarah Secure Their Retirement and Legacy
Client Segment: Family Office
Client Profile: Recently retired couple, early 60s
Assets: ±R25 million in local retirement funds, USD 2 million offshore, R6 million local cash
Monthly Living Needs: R80,000 net
⭐ Quick Summary: How We Helped Andrew & Sarah
1. Structured two living annuities with 2.5% and 4% drawdowns
2. Moved USD 2m into offshore wrappers, reducing CGT & executor fees
3. Built a 6% dividend-yielding share portfolio for income
4. Updated estate planning across local and offshore assets
5. Integrated tax experts to clean up and future-proof compliance
6. All under a flat monthly fee – no % of assets charged
What We Did: Family Office Case Study Framework
1. Structured Living Annuities for Flexibility, Tax Efficiency, and Future Optionality
We split their retirement funds into two living annuities:
1. Annuity A: 2.5% drawdown rate, aligned to an Inflation +3% investment strategy
2. Annuity B: 4.0% drawdown rate, aligned to an Inflation +5% investment strategy
This structure provided the following benefits:
- Diversified investment mandates with different growth expectations
- Flexibility to adjust drawdowns or investment risk over time
- The ability to convert one annuity to a guaranteed life annuity in future, if they seek more income certainty later in retirement — especially as annuity rates become more attractive with age
Combined starting income: ±R960,000 p.a.
- Net of tax this meets about 3/4 of their income needs while keeping drawdown rates sustainable.
Read More: Understand Living Annuities in South Africa, How They Work, and the Pros/Cons
2. Repositioned USD 2 Million Offshore into Wrappers for Long-Term Gains
We exited their existing (underperforming) offshore holdings, incurring R500,000 in upfront CGT, and reinvested the USD 2 million via offshore wrappers. The benefits were substantial:
1. CGT rate dropped from 18% to 12%
2. Saved executor’s fees of ~4% — equivalent to R1.44 million on their offshore capital (USD 2 million at ZAR18/USD)
3. Avoided situs tax risk on US and UK shares they held directly (particularly problematic because their US shares were valued at over USD 60K which can attract US estate costs on death of 40%)
4. Consolidated tax reporting, removing administrative headaches
Importantly, the new wrapper portfolio is managed under a long-term USD Inflation +6% mandate (target return ~9% p.a.).
Assuming 10% withdrawals every 5 years for lifestyle needs, the total CGT savings due to wrapper use would be:
- Over 10 years: ±R44,000
- Over 20 years: ±R128,000 (And potentially more depending on future tax rates and portfolio performance.)
After 5 years, the wrappers also unlock tax-efficient withdrawals, providing optional income top-ups.
Further Reading: Offshore Investing and its Benefits for South Africans
3. Local Cash: Smart Structuring for Income and Emergency Liquidity
- We shifted R5 million into Sarah’s name to reduce tax liability (donations between spouses are tax exempt)
- Built a dividend-growth share portfolio with a 6% starting yield, equating to ±R300,000 p.a. of tax-efficient income (and expected to grow ~6% p.a.)
- Set up a R1 million institutional money market account in her name for emergency access — benefiting from higher institutional rates vs. retail, and ensuring liquidity in the event of his death while estate transfers are processed.
- Created an annual tax saving of about R75,000 p.a. between them
They’re now comfortably exceeding their R80,000 p.m. net targeted income goal in retirement in a sustainable manner.
4. Updated Wills and Beneficiary Designations
We facilitated a comprehensive estate planning review:
1. Wills now clearly reflect both local and offshore assets
2. Beneficiary nominations across wrappers and annuities were revised and aligned
3. Executor roles were clarified and liquidity needs modelled
Read More: Your Complete Guide to Estate Planning in South Africa today.
5. Set Up the Next Generation for Success
Helped their adult children:
- Open and fund investment accounts
- Understand the basics of investing and compounding
- Begin building their own financial foundation
6. Cleaned Up Offshore Compliance
We brought in a tax expert to:
- Reconcile and clean up years of offshore records
- Ensure proper alignment with SARS requirements
- Eliminate any risks of future audits or penalties
Their prior offshore institution lacked proper reporting tools — creating unnecessary risk. We fixed that.
Offshore Trust Not Justified
We considered an offshore trust structure, but concluded it wasn’t necessary. The offshore wrapper structure delivered 95% of the benefits at a fraction of the cost, without the ongoing complexity.
📈 The Outcome – Long-Term Clarity and Control
Andrew and Sarah now benefit from:
1. Reliable, tax-efficient income
2. Proper offshore structuring with ongoing flexibility
3. Clean estate plans across jurisdictions
4. Lower stress, knowing their children are on track too
Further Reading: A Retiree Client With a Less Complex Balance Sheet With a Fee That Reflects That
💡 The Henceforward Family Office Client Advantage
Andrew and Sarah have a total balance sheet of approximately R67 million, spanning retirement assets, offshore investments, and local holdings. We serve them on a flat fee of R120,000 per annum (reviewed annually)— a fee determined by the time, complexity, and strategic input required, rather than the size of their portfolio.
That flat fee equates to just ~0.18% of their total assets, compared to the ±0.50% p.a. charged under traditional AUM models — which would amount to ±R335,000 p.a. A difference of more than R200,000 per year.
But our value goes far beyond cost savings:
What does our fee deliver — beyond personalised advice, structure, and ongoing partnership?
Executor’s fee savings: ±R1.44 million (by using offshore wrappers)
CGT savings: ±R128,000 over 20 years (wrapper tax efficiency)
Tax savings: ±R75,000 p.a. (via smart local structuring and income splitting)
AUM fee savings: ±R215,000 p.a. (versus traditional fee models)
Portfolio alpha: By benchmarking performance, replacing underperforming managers, and aligning portfolios to clear mandates, we’ve added an estimated 1–2% p.a. in net performance — which, on a R67 million portfolio, compounds to millions in long-term value
💬 “We finally feel like everything is under control — and more importantly, that someone’s thinking about what comes next, looking after our best interests
With Henceforward, you’re not just paying for advice — you’re gaining a disciplined partner who optimises every layer of your financial life: strategy, tax, cost, performance, and legacy.
FAQ On the henceforward family office approach
Here are some of the most common questions we get from clients when it comes to flat-fee advice, offshore structuring, investment performance, and tax efficiency. These FAQs are designed to help you understand the thinking behind our strategies — and how they might apply to your own financial journey.
Read More: Henceforwards Unique Flat Fee Approach
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1. How does a flat-fee model compare to traditional wealth management fees?
Traditional advisors often charge 0.50% or more of your assets annually. For a R67 million portfolio, that’s over R335,000 p.a. Our flat-fee model in this case saved the clients more than R200,000 a year in fees — without compromising service or performance oversight.
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2. Q: How much does Henceforward charge for financial planning and investment advice?
We charge a transparent flat annual fee. In Andrew and Sarah’s case, this is R120,000 p.a., based on the complexity and size of their financial affairs. We do not charge a percentage of assets under management.
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3. What is an offshore wrapper and why did you use one?
An offshore wrapper is a tax-efficient investment structure. For Andrew and Sarah, it helped reduce CGT from 18% to 12%, avoided situs tax and executor’s fees, and simplified estate planning across jurisdictions.
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4. How did Henceforward improve their investment performance?
We implemented clear investment mandates, removed underperforming holdings, and held their portfolio managers accountable to proper benchmarks. This has added an estimated 1–2% p.a. in net performance over time.
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5. What tax savings were created by restructuring their assets?
Between executor’s fee savings (R1.44 million), CGT efficiency (±R128,000), and R75,000 p.a. saved by moving cash into a dividend-earning structure, we’ve created tangible tax and cost benefits that more than pay for our advice.
Carl-Peter lehmann
Carl-Peter is a Certified Financial Planner and director at Henceforward. With over 20 years of experience advising high-net-worth individuals and families — both in South Africa and international financial centres — he specialises in retirement planning, offshore investment strategy, and holistic wealth management. His focus is on delivering clarity, simplicity, and long-term value through a transparent flat-fee model.
