There are over 3000 managed investment funds in the UK alone giving people a huge choice when deciding where to invest. Some clients we speak to are more than happy to do this themselves. However in an increasingly complex world, we find more and more people are seeking advice to help work through the huge amount of choice available.
In our case study below, we run through the scenario of some new clients who thought they could manage their portfolio themselves. However eventually they decided they would prefer to take professional advice.
Mr and Mrs L were referred to the services of Investment Solutions in 2016 aged 52 and 58 years. They were referred to us having recently made a Will with their solicitor who recommended a financial wealth check. They met up with our Managing Director Ivan Lyons for a face to face review. The clients had the aim of retiring in three years and seeking capital appreciation from their portfolio(s).
Whilst living in and owning their home, they had attained ISA portfolios of £150,000 each and a Self Invested Personal Investment Plan of £400,000. Although the meeting was productive the clients felt that having never engaged with a financial adviser previously, the cost was a price that they were not prepared to pay and elected to advise themselves.
They transferred their portfolio to an online platform taking guidance from the company’s Best Advice List but not engaging with advice. They had some winners, but a number of losers and of course with human nature as it is, held on to the loser holdings longer than perhaps they should have, in the anticipation that they would return positively over the course of time, of which as is the way most of them did not! As a result, the clients re-engaged with ourselves three years later, whereby a plan of action was undertaken including: –
- To secure their long-term future, to get them through the rainy days and to pay for holidays and luxuries – a plan of action was put in place by holding appropriate cash/fixed term deposits;
- To arrange a plan to build their wealth as sufficiently as possible for the longer term;
- We implemented a portfolio to help the clients sift through the many rules and product options in regard to pension planning and our portfolio was constructed with the view to maximise their long-term prospects;
- The portfolio created, took account of the clients attitude to investment risk, experience and goals. We also ensured the portfolio was diversified across all asset classes, different funds and fund houses.
As a result, the plan was implemented and reviews set up six monthly to take into account changes in circumstances, e.g. health, income requirements, tax position, capital needed and to review the investment portfolio.
The clients are now content that the “risk” has fallen upon our shoulders and that the cost of advice is lower than the returns having being achieved from their portfolio(s) that a lay person would have attained.
