Nathan Munt, Chartered Financial Planner, details how he helped a client navigate the complexities of investing.
The client had never invested before and needed professional financial advice.
The case
The client approached us because she had recently inherited £145,000 from her late father. As she had little prior knowledge of investing, she wanted to ensure that she was putting the money to good use.
After discussing her current lifestyle and future, Nathan found that the client’s immediate monetary needs were largely met by other sources of income. Therefore, he worked with the client to determine the following objectives:
- save for the long-term in case she unexpectedly requires the funds in the future;
- retain the ability to replenish her remaining cash funds in the future;
- visit her daughter who lives abroad, requiring £6,000 in the short-term;
- avoid investing tobacco or companies that use animal testing; and
- use her investments to support environmental causes.
These points allowed Nathan to create a clear roadmap for her investment journey. To achieve her long-term goals, the client committed £100,000 so that she still had sufficient money to meet her short-term needs and replenish cash reserves. At the time, COVID-19 had made the markets highly volatile, so Nathan agreed to phase investing over three months to spread out the timing risk.
As part of her financial plan, the client agreed to restructure her assets.
- Funds were transferred from an existing cash ISA into a Stocks and Shares ISA. This money was replaced with the £45,000 remaining from her inheritance, so she could maximise her tax-free Annual Allowance. The funds were split between savings accounts and Premium Bonds.
- Funds were placed into a General Investment Account (GIA) that allows Future Bed and ISAs to be easily completed every year to improve the overall tax efficiency of her portfolio.
- Investments were placed in a sustainable investment solution that promotes ethical and sustainable factors, while screening out activities that did not ethically align with the client’s values.
Nathan completed a six-month review of the client’s portfolio to check in and discuss how she was finding her first time investing. She could ask questions, raise any concerns or inform him about any changes to her circumstances.
After following Nathan’s advice, the client has the peace of mind that her investments are being managed according to her wishes.
Important information
The contents of this case study do not constitute financial advice. The suitability of the investments used and the impact of taxation (and any tax relief) depends on individual circumstances.
This has been prepared based on our current understanding of UK Law, Taxation and HMRC practice, all of which could be subject to change in future. The value of investments can fall as well as rise and it may not always be possible to receive back the sum initially invested. Past performance is not necessarily a guide to future investment returns.
