Our client had recently inherited a substantial sum from their family estate. With their newfound wealth, our client sought to secure their financial future, invest wisely, and ensure adequate protection for themself in the event of unexpected circumstances.
Background
Our client, 38, had been focussing on building their career and financial stability before receiving the inheritance of £400,000. Single and without children, they owned a home and had some modest savings.
Key Needs
The primary objective of our client was to effectively manage and grow their inheritance, while securing sufficient income for their future needs. Our client required a comprehensive investment strategy to optimise the inheritance and ensure it aligned with their long-term financial goals. During our initial assessment however, we also identified critical gaps in their protection planning. These oversights left them vulnerable to financial instability in case of unforeseen circumstances.
Our Solution
Having completed our factfinding exercise, we took the time to understand our client’s attitude to risk and capacity for loss. We concluded that our client would be prepared to take a moderate to adventurous level of investment risk, hence we looked at investments that were largely equity-based but with other assets included to provide some diversification. Our client had expressed some preference towards responsibly managed funds too, so we made sure that this was accounted for within his portfolio.
Once we were satisfied with the investment strategy, we created a diversified portfolio which focussed on utilising tax-efficient vehicles like ISAs and pensions. As our client had a high salary and had not made large pension contributions previously, we identified that they were able to make contributions above the standard annual allowance. We also set up a general investment account to help our client effectively utilise their ISA and pension allowances each year, whilst also making use of their capital gains tax allowance.
Alongside this, we reviewed the employee benefits available through their current employer, and recommended that they establish Critical Illness Cover to provide a lump-sum payout in the event of of a severe health diagnosis, ensuring they would have additional financial support during challenging times.
We also advised them to set up an Income Protection policy, as this too was not offered by their employer. This policy would pay a percentage of their salary if they became unable to work due to illness or injury, thus safeguarding their financial stability and ensuring that any household bills could continue to be paid. This was particularly important for our client, as they had no other household income to fall back on.
Through a bespoke financial plan, we empowered our client to take control of their financial future. By addressing their investment needs and ensuring adequate protection, we laid a solid foundation for their long-term financial security. Regular reviews and adjustments will be key to adapting to any changes in their life circumstances or market conditions, ensuring that they remain on track to achieve their financial goals.