Pre-retirement strategy | A case study

Mr and Mrs Smith were in their mid 50s and approaching retirement. Mr Smith was a self-employed consultant and Mrs Smith worked for the client service department of a large company. Throughout their careers they had accumulated a significant number of pension schemes that were sponsored, and partially funded, by previous employers. They found the amount of paper work, and the multitude of different funds, difficult to follow. Furthermore, they found the customer service of the large insurance companies very impersonal.

Because of this they decided to look for an investment manager who could provide a more personal service for them. In addition, as their pension provision was adequate, they were looking for someone who could help them reduce the level of overall risk in the portfolio. However, they still wanted some growth in the value of their investments, but in a way that was more carefully controlled than on offer in the wider stock market.

We suggested a portfolio with around 60% invested in bonds, preference shares and other defensive investments. The balance would be conservatively invested in shares. The overall objective of the portfolio was to provide a rising income and earn an overall portfolio return in excess of inflation after fees.  They were pleased with the growth that the portfolio achieved. Please see link for past performance

They were also very satisfied with the overall level of client service. Twice a year they received a short update explaining the outlook for their investments. If there were any important market events during the year, such as Brexit or the 2019 UK election, they were sent an update outlining how it was expected to impact their portfolio.  Furthermore, when any new investments were recommended they received a short email explaining the rationale behind it. They also found the regular face-to-face portfolio reviews useful.  It allowed them to assess the progress made and to discuss whether, in the light of their current situation, any strategic changes needed to be made to their investment strategy. Although this strategy might not have been appropriate in all cases, it worked for Mr and Mrs Smith as it gave them peace of mind.

Mr and Mrs Smith were not sure whether, when they retired, they were going to buy an annuity. When the moment came they were going to seek the advice of a financial adviser. However, if they chose to continue with their investment portfolio they would seriously consider our income strategy.

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