Case Study: Investment Portfolio Review

Background

The portfolio consisted of some UK stocks as well as a range of UK and Global unit trusts and OEICs.  Fred and Irene wanted advice as to how the manage the investments with a view to maximising capital growth over the next ten years and to provide tax efficient income to support them in retirement thereafter.  They were both working full-time, had more than sufficient income to meet their needs and had no liabilities.

Objectives and Planning

Having obtained full details of Fred and Irene’s position it was clear that the funds they had inherited were available for long-term investment. They each completed a risk profile questionnaire to establish a basis on which to assess their risk tolerances.  Although their scores differed a little, they both fell within a Growth risk profile and following discussion it was agreed that this was appropriate for their current circumstances and objectives.

Our Investment Team reviewed the existing portfolio of assets against Fred and Irene’s identified risk profile and found that the portfolio was heavily equity weighted with very little in terms of asset class diversification.  It was also invested over 70% in the UK.

Outcome

We provided the clients with a detailed investment report which summarised their planning objectives and existing assets.  The report highlighted how the existing portfolio exceeded the desired level of risk due to the high level of equity exposure and UK bias and how that could be rectified by making some changes.

The report also summarised the potential Capital Gains Tax position, which was minimal in this case, and how the monies could be used to fund their Stocks & Shares ISA allowances each year to effectively shelter from tax the majority, if not all, of the portfolio by the time they wanted to start drawing an income.

Follow Up

We provide Fred and Irene with an annual review at which we rebalance their portfolios to bring them back in line with our model asset allocation for their risk profile. We also discuss their planning objectives to ensure they continue to be met.

They regularly access their portfolios on-line to obtain real-time valuations.

As they approach retirement we will assess whether a reduction in risk would be appropriate to enter in to a capital preservation mode, rather than capital growth.

If you would like to know more about how we as Financial Advisers can help you  with your Investments then visit the Investment Management section of  our website: Investment Management or send us email at: [email protected]

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