Investment Planning case study
The People
PB had various investments, built up over a lifetime, which included shares from demutualised building societies, ISAs, premium bonds, deposit accounts, unit trusts and investments bonds. These ‘bits and pieces’ amounted to almost £200,000.
PB had retired some years earlier and relied on his savings to boost his income.
The Problem
Although PB had been interested in following the markets he now found dealing with all the paperwork a nuisance.
From an investment point of view:
- some of his shares that had previously paid good dividends were no longer doing so
- the rates of interest on his various deposit accounts, which had been competitive, kept falling as the banks brought out new accounts to attract new savers leaving those already invested on uncompetitive rates
- the values on the various ISAs and investment bonds fluctuated and although some of the ‘with profit’ bonds had performed well in the past this was no-longer the case and he was locked in by withdrawal penalties: so called ‘market value adjustments’ (MVAs).
The Solution
We carried out a full review of PB’s finances and worked out with him a strategic financial plan that took account of both his needs and objectives and his attitude to risk. We then helped PB to implement this plan.
We:
- arranged the sale or encashment of investments that no longer suited PB’s plans
- sold shares over two financial years so that PB would benefit from two sets of CGT exemptions
- arranged encashment of one with profits bond on an MVA free anniversary
- helped PB withdraw funds from other with profits bonds up to MVA free limits
- organised a savings account paying competitive interest for PB’s agreed cash reserve fund
- arranged the investment of funds earmarked for long term investment with discretionary portfolio managers
- arranged for the automatic use of PB’s ISA allowances via his discretionary portfolio, so that progressively more of PB’s capital growth and income would be tax free
- arranged for the portfolio to be managed defensively, to match PB’s risk profile and produce the income he needed in a reliable way.
- maintained a watching brief over PB’s financial planning arrangements. This includes keeping the overall strategy under review to allow for changes in PB’s circumstances and in the worlds of finance and tax.
- reviewed the portfolio managers’ performance on an ongoing basis
- ensured that PB received regular, consolidated reports. This enables him to keep track of his finances and limits paperwork
With our help, from having a fairly random assortment of investments and little control over the situation, PB now has a coherent investment strategy which suits his situation, his investments are professionally managed and monitored and, not least, he has far less paperwork to cope with.
Who to contact
Philip Kingscott
Senior consultant
Email
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