In brief: Complex assets in divorce, made simple

Shares, crypto, business interests. Complex assets can feel like a foreign language during divorce – but with the right knowledge, they don't have to.

Kate is joined by Tom Francis, Head of Personal Finance at Octopus Money, to explore what complex assets actually are, how they're approached in a divorce settlement and how to feel confident making the most of your finances after divorce.

We talk about:

• What makes an asset 'complex' – and the three levels of complexity
• What can and can't be divided in a divorce settlement
• What to consider when negotiating complex assets
• Tips for understanding your assets and building financial confidence post-divorce

This episode is for anyone who feels overwhelmed by the financial side of divorce – and is ready to feel more in control of their future.

Meet Tom Francis

Tom is Head of Personal Finance at Octopus Money, a money advice brand for everyone. Tom spends his time designing the customer journey to deliver regulated financial advice to the many, using the best of technology and humanity. He’s a fully qualified and chartered financial planner, and before joining Octopus Money, he played a leading role in building and scaling robo-advisers in the UK, including Wealthsimple (which was later sold to Moneyfarm) and Nutmeg.

You can learn more about Octopus Money on their website. You can also hear more financial advice from Tom on the Keep the Change podcast, and follow him on Instagram for bite-sized money tips. 

More divorce resources

Ready to take a practical next step? 

Book a free 15-minute consultation with an amicable expert for guidance on the legal, financial, emotional or co-parenting aspects of separation. 

You can also book a free consultation with an Octopus Money expert for specialist financial guidance alongside your separation.

Want ongoing support through separation?

Kate’s book amicable divorce includes a dedicated chapter on navigating finances during separation, including reaching financial agreements based on your real needs (not just 50/50 splits) and guidance on commonly overlooked assets like pensions. Find it on Amazon today.

Got a question for a future episode?

Share your thoughts at hello@amicable.co.uk or through direct messages on Instagram.

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Transcript

SPEAKER_01 0:05

Welcome to the Divorce Podcast, where we explore relationships, divorce, separation, and parenting apart. This episode is part of our new mini-series where we answer your questions, discuss current news and events, and share practical bite-sized tips. I'm your host, Kate Daly, a relationship counsellor, divorce specialist, and co-founder of Amicable, the online legal service for separating couples. This week I'm delighted to be joined by Tom Francis, Head of Personal Finance at Octopus Money, to talk about assets many people find complex, from shares to crypto and beyond, and how to navigate them during and after a divorce. Welcome, Tom. Thank you. Thanks for having me. I'm excited. Lovely to see you. Now, complex assets and divorce. This is just a bit of a whistle stop of some of the more complicated products or forms of money that people might be holding and therefore need to divide when they divorce and separate. So let's kick off. What are some of the examples of more complex assets?

SPEAKER_00 1:07

Yeah, generally I would bucket assets into three levels of complexity really, really crudely. I would say there are your least complex assets, and you could probably put things like cash savings into that. Then kind of your bucket two of complexity, I would say, are things like pensions and investments and stocks and shares ISES, ultimately things that tend to be made up of lots of different things and that tend to change in value on a on a daily basis. So that's probably that middle bucket. And then you've got your most complex assets, which I would give examples of things like cryptocurrencies, maybe even limited companies. We could even talk about, you know, fine wines or or art. All of these are things that certainly do hold a value, but ultimately are a little bit harder to either sell or understand. And I think that's how I define complexity. How easy is it to understand and how easy is it to sell?

SPEAKER_01 2:09

Yes, that's really interesting, isn't it? Because I think that understanding of the asset, that's where a lot of the problems can come when you're trying to negotiate a settlement. Because sometimes it's just ignorance, isn't it, on people's parts rather than any natural objection. I also think sometimes what plays into it is this idea that some people just want the simple assets, cash. And not all assets, even if they've got a value that looks the same, could be considered to be equal. We always say a pension pound isn't as valuable or is less valuable than a cash pound at the point of divorce. But later on in life, it it might be the other way around. So it complexity means lots of different things, doesn't it?

SPEAKER_00 2:49

Yeah, I I totally agree. And I think as as I'm sure we'll we'll come on to, there are pitfalls that come with more complex assets. And one of your kind of safety nets throughout this, which I will forever be a broken record about, is trying to have a bit of a plan and a financial plan. Because time and again I have seen individuals who prioritize simpler assets, like maybe the family home or cash, without necessarily thinking about their situation in 10, 15 years' time, where you know you may find yourself in the position where you need to sell the family home to fund life. So having an awareness of the link between assets and a plan is crucial.

SPEAKER_01 3:35

Yes, absolutely. And I like your point that you made early on as well, which is some of the difficulty with this is that some of these assets are quite volatile in value. So they go up and down. And depending on the point at which you do a financial disclosure, you could have a very different number in terms of dividing assets when you start and when you actually come to divide. And that can be a really tricky thing for people to get their heads around as well, because a divorce or a consent order takes several months and therefore the values change constantly. So sometimes I think people are looking for an absolute answer when there isn't an absolute answer. And I think people are quite shocked sometimes when they get to the sharp end of doing all of this and filling in all the forms at how almost rough and ready it is. Because even if you get it exactly right on the day you file your form, your form will take possibly two months to travel through the court signing process. And therefore, in two months' time, your whole share portfolio could be completely, a completely different number. So I think that's one of the things to say with complex assets, they move up and down all of the time. And that can make it incredibly frustrating and difficult for people to know how to divide them up.

SPEAKER_00 4:52

Yeah, it's such a good point. Yeah.

SPEAKER_01 4:54

What's what's your advice on dividing? Are there any principles that people should think about when they're dividing these more complex assets that are more volatile and have varying valuations?

SPEAKER_00 5:05

Yeah. So if I refer back to the three buckets, I think it in terms of buckets one and two, it tends to be slightly more uh simple to approach those. Generally, they can be divided by two if that's the route that the settlement ends up going down. Whereas that third bucket, there are certain assets that are very hard to break up or or divide. And so the the first thing I would note about those more complex assets is that usually what might happen with them is they would be offset as part of a settlement. So one part of the relationship might take ownership of that more complex asset and its value would then be offset using other uh cash or or or simpler types of assets that are part of the separation. So be aware that offsetting tends to be a common route for more complex assets. The the principles that I would recommend that people think about when there is a more complex asset as part of a separation is I would ask people to think about four things with that asset. So the first is try and have an awareness of what that asset's paper value is. And what I mean by that is what is it currently kind of denoted as being worth. And the reason that's important is that has a difference in value to the next point I would ask people to consider is a usable value. And you gave a great example earlier around a pension might be worth£100,000 and a savings account might be worth£100,000 of pounds. But be aware that that pension can't be withdrawn from until age 55 under current rules. And so even though their paper value might be the same, their usable value could be very different. So have an awareness of that. The third thing I would note is when thinking about an asset, does it produce an income? Would it pay you anything on a regular basis? If yes, great. If no, let's at least be clear about that. And then finally, I would say, how accessible is the thing? You know, could you withdraw from it tomorrow, or would you have to sell the whole thing in order to get your hands on it? What are then the tax implications of doing that? So to try and stop me waffling, I would say paper value, usable value, does it produce income? Can I access it?

SPEAKER_01 7:40

Yeah, that's really interesting. Because I think sometimes we don't think about those. We're looking in a divorce at just the number, and that is to give a very one-dimensional view of it. Do you think it's advisable to try and have a mix of different types of assets and products?

SPEAKER_00 7:58

Generally, yes. Now, the thing that will help unlock the true answer to that is a financial plan, but I won't go on about it again. But generally, yes. One of the kind of pillars of great financial planning is diversification. Having access to different investment types at varying levels of risk is generally a really, really sensible thing. The thing I would note though is be aware with most modern types of investments today. As a rule, they can be easy to make changes to. And so, with help, maybe post-separation, you could find yourself in a position where you could build diversification or or generate diversification from what has been apportioned to you. But to answer your question really simply, yes, diversification is really powerful.

SPEAKER_01 8:46

Yeah. And I know that there are going to be people listening to thinking it, that's just not possible. We have one pension and one house, and we need to separate them. And we want the house for the kids, and therefore one of us has got to keep the house and the other one's got to keep the pension. What do you say to people in that scenario then?

SPEAKER_00 9:02

Yeah, I I think my advice would be start by building a plan of what the future might look like. So in the example that you mentioned there, where the house is is required for the the children, then starting to plot out what the next five years might hold, now, whether that be school fees, whether that be just general expenditure, enables you to work backwards to the now and start to understand, okay, what do I need access to in order to achieve that future life? And it's one of the things that we do with Octopus Money. We we tend to build different scenarios into the future of what expenditure might look like. I would say that's the starting point. And if that can be done during or or or pre-separation, it will hopefully help with being clear about what's needed in terms of access to investments. And then working from there, I would say.

SPEAKER_01 10:01

Yeah. I think you're right. I think it's, I would say there's life after divorce. And whatever asset you end up with or assets that you end up with, you can still go and get some easy planning advice for where how to build from what you've got. Because yes, you might have thrown everything up in the air, it might have landed, but you can take where it's landed and move from there, can't you? So if you end up with a complex asset that you didn't previously manage, what are kind of like the first steps that you should take to try and understand what you've got and make the asset you've got work towards your money goals?

SPEAKER_00 10:36

Yeah, great, great question. So the first thing I would say, as with most difficult financial situations, take your time. The first thing that we as humans feel is a need to solve it straight away and kind of rush to make a decision. Try to take your time. And the nature of complex assets is that once you have made a decision, it's probably going to be quite difficult to unwind. So really, really slow down and take your time. Point two, I would say, is seek help and recognize you are not and should not be the absolute expert in this. We as humans with busy lives going through difficult situations, there is help available that you can benefit from. So do enlist that help. And that that could come in in different forms. You know, if if it is a complex asset, then what you could seek out is some independent specialist help about that asset. And they can help you at least understand what its true value is, how it might support your financial plan, and whether it's easily accessible, referring back to those, those kind of principles that I mentioned before. So I'd say don't be afraid to seek help. And then finally, if you haven't already broken record, build that financial plan and understand what goals are in the future and what access to money do you need need now. It could well be that the complex asset turns out to be the perfect setup for your future. It could pay you an income that you need and it could be accessible in the future to help you meet a major goal. Equally, it might not be the perfect fit, but ultimately the plan is going to help you answer those questions and ensure that you're set up in a really suitable way. Well, that's great advice.

SPEAKER_01 12:23

Now, in just a moment, Tom will share his top tip for navigating divorce with more complex assets, and you wouldn't want to miss that. But before he does, if this episode has given you a bit of clarity or comfort or just a tip that made things feel a little bit more manageable, make sure to follow the divorce podcast on your favorite podcast app. Each week we're here with expert advice and real support to help you through the separation one step at a time. Right, Tom, final tip. What is the single biggest thing you want people to know about navigating complex assets in a divorce?

SPEAKER_00 12:57

If I had to choose one, of which I could give several, I would say recognize that help is available to you and you are not required to be the expert with these assets. I think please lean on experts and people who are here to be on your team and on your side and can ultimately make sure that you're approaching a complex asset in a way that suits your plans and makes you have a future that you look forward to as opposed to one that you would probably prefer to ignore because it's just a bit daunting to think about these kind of things.

SPEAKER_01 13:36

I like your thing about if you've got a goal, then you can see whether or not your complex asset stacks up against your goal. That's everything, isn't it? Because yeah, a complex asset without a context around it is a bit overwhelming, isn't it? But when there's a context, which is I want to be in this position or I need to look at this much cash coming down or whatever it is, if you've got that plan, you've got something to check against. And I really like that idea. So brilliant tips. Thank you very much. Where can people find out more information about you, Tom?

SPEAKER_00 14:07

Yeah, please find us with octopusmoney.com online, or I'm I'm available through all social media channels pretty much at plan with Tom. Fantastic. Thank you.

SPEAKER_01 14:17

For separation and co-parenting support, please visit amicable.co.uk where you can explore our resources and our tools and book a free advice consultation. And of course, you can find me on LinkedIn and you can hear more about new podcast episodes by subscribing for updates and visiting thedivorsepodcast.com or on your favourite listening platform. Finally, we'd love to hear more from you and please share any questions on divorce separation or co parenting with us at hello at amicable.co.uk. Thank you very much indeed, Tom, and thank you everyone for listening.

SPEAKER_00 14:52

Thank you so much.