Case Study - Peter & Sharon

Too Much Risk...

Peter & Sharon

Peter & Sharon had recently sold their business after grafting at it for over 30 years.

Now aged 60, with no children, their primary concern was to ensure a high return on their capital.

Two different financial advisers had discussed various investment scenarios. Each of the advisers had put forward their recommendations based on the 'risk/reward' profile they had identified for the client.

To satisfy the requirement for a high return both advisers had recommended a fairly adventurous investment portfolio heavily weighted towards equities and other volatile asset classes.

However, before investing their money, Peter & Sharon were recommended by their friend to speak with Henwood Court.

We helped them to identify the objectives that would make their retirement more fulfilling and meaningful in order to cost of their lifestyle over the remaining period of their life, allowing for inflation and the impact of possibly funding long term care.

On understanding Peter & Sharon's goals, and using sophisticated financial planning software and financial modelling techniques, Henwood Court came up with some surprising conclusions.

We were able to demonstrate that a return of just 0.5% above inflation would be sufficient to ensure they never ran out of money. We importantly identified the 'Target Return'.

The clear message for Peter and Sharon was don't rush out and make an investment, take time out planning first!

Planning helped Peter & Sharon to understand that there was absolutely no need for them to flirt with unnecessary risk. What they needed, in fact, was a lower return with more certainty - a tax efficient portfolio which would give them the peace of mind to enjoy their retirement without having to worry about the markets.

Henwood Court saved them from becoming another pair of 'regretful victims' who had failed to plan and consequently plunged into an investment, often seduced by the 'headline' features of the product, but without clear understanding of the inherent strategy. Because they understood their target return they made a much shrewder decision.

We then created an investment portfolio designed to return their target return within a cautious strategy which allows then to rest easy when the stock market is going through one of its volatile periods.

Peter & Sharon continue to enjoy their retirement and Henwood Court continue to meet with them on an annual basis to review their retirement plan and investment portfolio. More often than not the discussion involves how much more they can afford to spend to make the most of their carefree retirement.

This case study is and based on a client scenario to illustrate our typical client work and advice process. Identities have been changed to protect privacy.