Growth strategy | A case study

Mr Scott was a partner in a professional services firm and was approaching his fortieth birthday. He had accumulated some modest pension savings but he recognised that if he wanted to look forward to a comfortable retirement his current pension provision was not going to be sufficient.

He had been meaning to do something about pensions for many months now. However, he was put off by what he saw as their complexity. In addition, Mr Scott struggled to understand the widespread use of pension jargon that was employed by the financial community.

Mr Scott, after reviewing his pension vehicle through an IFA, was introduced to us by an existing client. We arranged an initial meeting with him to discuss his situation. We explained that the key advantage that a properly invested pension portfolio had, over many other investment vehicles, was that its time horizon was a lot longer. This meant that it could purchase investments at attractive prices during panics and short-term market sell offs. With this in mind our growth strategy invests on a three year time horizon with the aim, not guarantee, of making thirty percent total return (the sum of dividends and capital gains) after all fees and charges. Furthermore, the abolition of the requirement to buy an annuity means that pensions have become a much more flexible investment vehicle. For example, it is now possible to pass on the capital to children and relatives.

Mr Scott said that whilst he now understood the key benefits of a pension fund he still found them complex and opaque.  We explained that our approach was based on a psychometric survey and careful questioning through a fact finding process. Subsequently we helped him decide upon his investment objectives and the amount of risk that he wanted to take. Once this had been finalised we explained that we constructed a bespoke portfolio based on his requirements. The majority of the portfolios are made up of holdings of individual bonds and shares that we research ourselves. This approach gives us the flexibility to respond to individual needs and circumstances.

Mr Scott decided to invest with us and was happy to make regular monthly contributions to his pension fund. He found the biannual investment outlooks informative and appreciated the short explanations of any recommended changes to his portfolio. He was pleased with the returns that the growth strategy had generated. Please see link for past performance. Although this strategy might not be suitable for everyone, it worked for Mr Scott as it provided a solution to a difficult problem.

If you would like to know more please contact us on 07838 360579 or email rf@coloma-wealth.com

Past performance is no guarantee of future returns. Investors should seek advice about their own circumstances.

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This post was written by Tim