Advice Needs:

Tony came to Investor Profile needing advice on his investments, and general financial planning for the future. He felt uneasy with the lack of clarity he had around spending money. He knew he was in a fortunate position not to have to work for a living but did not know how much he could realistically spend and still be comfortable for the rest of his life.

He also had two ‘pots’ of investments that needed assessing. One was being managed by an investment manager, the other by himself. The difficulties in the stock markets through 2010 and 2011 had made him realise what a task it would be to look after the investments himself full-time, something he probably would not like to undertake long term.

Tony is also interested in developing some property projects with the cash he has available and wanted advice on how these could fit into his overall financial situation.

Finally, he wanted to know what a change in circumstances, such as getting married and having a family, would have on his financial position, and consider various scenarios that would allow him to understand this better.

Current Position:

Tony had a portfolio of investments worth £1.2m that was split between a stockbroker and his own online account. He had around £50,000 in cash and received c. £50,000 of annual income from his investments. This includes a buy-to-let property worth £850,000.

Tony does not work for a living but manages his investments and maintains his interests in community work as well as enjoying his lifestyle with holidays and time with family and friends.

What we worked on:

Because Tony has a fair amount of flexibility in his plans the first thing to do was to get an understanding of who Tony is. It was important to find out more about the person he is and wants to be. What does he want to achieve? What does he enjoy doing? What is missing from his life that could be worked on? Once we knew the answers to some of those questions we could really put a more meaningful plan together for him.

After some in depth discovery we established the main aims in his life were to develop his income and asset position, progress his interest in community and nature with charitable work and to plan for the eventuality of having a family.

Identifying this was important because it enabled us to put together an investment portfolio that was flexible enough for him to draw money from should he need it in the future, but also aimed for capital growth over the long term. He decided that he would not take an income from the portfolio as he would receive enough from his buy-to-let property to meet his expenses.

Having assessed the two existing investment pots it was clear that the one managed by the stockbroker was unsuitable for his needs and attitude towards risk. Tony wanted to set aside around £1m in a portfolio of investments that he knew would always be there. For that reason we needed to match the risk and volatility of the portfolio to that requirement. What he had with the stockbroker was a portfolio full of equities. This was a bit too risky for the need. So we built a portfolio that contained a broad range of investments that would aim to produce good levels of growth now, and income if ever he needed it in the future.

Tony also recognised that his desired lifestyle did not include sitting at a computer all day, every day obsessing about his portfolio. That’s what we would do! He therefore agreed it made sense to consolidate all of his assets into one portfolio that would be managed by Investor Profile.

We also agreed that he needed to give himself more cash if he was to pursue his property projects and retain enough cash to be comfortable with any planned or unplanned future expenses. We therefore agreed to take out around £200,000 from the investments he had and keep the long term investment pot at around £1m.

As for the aim to build up income and assets, Tony is still working hard and learning new ideas all the time. We continue to talk around this subject and continue to plan on what it could mean to his overall financial situation.

We are also continuing the discussions around his more personal needs to ensure he lives a life that is fulfilling. Tony has recognised that achieving financial goals and looking back at unfulfilled personal dreams would be “…a waste…” in his words.

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