Sue and David were a married couple with three young children, Sue was a teacher and David was a surgeon. They approached us because they had accrued a considerable sum of money in a number of cash-based savings accounts and wanted to explore the possibility of investing the capital to potentially receive better returns.
Initial Meeting and Information Gathering
Sue and David met with our adviser, Matt. In our initial free meeting and a follow up telephone call, we discussed Sue and David’s investment goals and investment time scales. In addition, they both completed risk questionnaires and we considered their attitude to investment risk and capacity for loss to ensure the portfolios we designed were appropriate for them. We also worked through a “fact find”, gathering information about income, expenditure, accounts, assets, loans and their broader financial picture, so we had a thorough understanding of their circumstances and their long-term goals.
We asked Sue and David their views on how involved they would want to be in making decisions about changes to their investment portfolio – and they indicated a preference for investment professionals to make the day-to-day decisions and keep them updated periodically.
Investment Strategy
We used the information gathered in the initial meeting to formulate an investment strategy which centred on the clients investing in a well-diversified multi-asset portfolio within separate Individual Savings Accounts (ISAs) and a joint General Investment Account (GIA). A multi-asset portfolio is a diversified collection of different types of investments such as shares, bonds and property funds from different geographical locations, for example the UK, USA, Europe and Asia.
Our strategy was to use Sue and David’s annual ISA allowances and migrate capital from their joint GIA into their individual ISAs each tax year, until all of the capital is invested in their tax efficient ISAs.
Recommendation Report & Implementation
We presented our proposal to Sue and David in a detailed report. In the report we included information on the past performance of the investments we were recommending, the strengths and weakness of our proposed approach, information on the different types of tax wrappers we suggested and most importantly a detailed breakdown of all of the costs involved in implementing our proposals.
Sue and David chose to proceed with our advice and to appoint us as discretionary investment managers on their investment portfolios, Having set up their investments, we now manage them discretionarily on an ongoing basis. This means we watch over the performance of their investment funds and switch them when we believe it is necessary to do so. We also rebalance their portfolios in order to keep them in line with their attitudes to investment risk.
