Client Case Study – Steven Watts
Steven came to Investor Profile just before the end of the 2014/15 tax year wanting to invest some money.
Steven had an amount of money that he was happy to invest as it was surplus to his requirements. As he already had a good amount of cash held as a reserve for himself, he wanted to start building up a pot of investments so that he could accumulate and grow his wealth over time, to make full use of his earnings.
What we worked on and the outcome of our discussions
The easy thing to do (being so close to the end of the tax year) would have been to either set up a Pension and get some tax back for Steven, or invest the money into an ISA to make sure he used up his allowance for that tax year (which would have expired on 5th April had it not been used).
However, the benefit of good financial planning is that it’s not an emergency service, it’s a planning service. That gave us the opportunity to really consider what would be best for Steven, as opposed to anything else. So we shut out all of the other noise and distractions that come with markets, investing, tax year end etc., and thought about what would be right for the long term.
So what we did was set up an ISA for Steven and created a bespoke portfolio for him to invest into. However, we didn’t invest his money straight away. Instead, we suggested investing the lump sum he had available over a period of time. The intention with that would be to spread his risk by not investing it all on a single day. As it happens that worked out very well for him. When he came to us, the FTSE 100 (for example) was around 6900 so he could have invested all of his money at that level. But because we suggested investing the lump sum over a number of months he’s now set to invest his last monthly sum with the FTSE 100 at 5900. So as an investor he’s really benefitted from the markets falls and will then benefit for years to come when they rise again.
Financial Position in 2016
As Steven has managed to buy his investments in a falling market over a number of months his overall investment pot is doing very well. He’ll continue to invest on a monthly basis indefinitely, which is a great way of building up funds for the future.
For more information, please contact Jaskarn Pawar, Chartered Financial Planner at Investor Profile Ltd on 01604 211234 or book online and take advantage of our £40 half hour financial planning session – http://investorprofile.co.uk/services/investment-surgery/