I'm not comfortable with the investments I have

David was a very successful businessman, who had sold his business for a significant sum of money, with the intention that he would spend more time with his friends and improving his golf handicap.

On the advice of a private bank he had invested a large proportion of his capital in a complicated offshore structure to mitigate tax. He now realised that he was not comfortable with the investments made, as he did not fully understand how they worked and also as the stock market had fallen since he first invested resulting in him loosing more money than he expected.

He now found he was spending an increasing amount of time looking through the financial press and worrying that although he needed to do something, he didn’t know what it was. One of his friends at the golf club, who is an existing client, suggested he should talk to us.

How we could help

We started by talking to David and established that part of the trouble was that, having run a successful company, David was not comfortable with the total lack of control he felt in relation to his capital. He needed it to last for the rest of his life and he was becoming concerned that it wouldn’t.

We were then able to illustrate to David that even if the capital fell by as much as 35% he would still be able to maintain the standard of living he currently had. But perhaps more importantly for him, we were also able to show him that he could target a lower overall rate of return without having to make any changes to his lifestyle.

The outcome

We provided David with a report containing an analysis of the existing investment structure including its benefits and limitations. We discussed his attitude to risk with him and having assessed this, proposed a realignment of his investments. This would achieve a more balanced spread of risk whilst continuing to mitigate any potential tax liability. We discussed the plan with David and it was amended following a number of his comments. We then worked with him to implement the revised plan.

Following on from this we produced half yearly summaries of all his investments. We meet with David each year so we are aware of any changes in his circumstances that are relevant, discuss the valuations and make suggestions for any amendments to the existing investments. Once a year we also update his personal cash flow picture to re-assure him that there is still no chance he is going to run out of money.

David now feels in control of his financial affairs. As a sophisticated individual he knows that markets can be volatile, but he is now much more aware of the level of risk he is exposed to and is happy that his financial future is secure.