#WealthGoals:
Freeing up time for travel and family

Many people know they need to make their wealth work harder, but are concerned that investing will involve a lot of hassle and time. Here, investment manager Tim Healy explains how Quilter Cheviot Investment Management created a powerful yet pain-free strategy for a recently retired couple.

The situation:

Our client is a recently retired couple with children in their late 20s and early 30s. Other than their house, they had savings and investments worth £500,000. The husband received a final salary pension that provided them with a sufficient income for the essentials in life. They wanted to keep £100,000 in cash at their bank while making an initial investment of £400,000.

Our clients knew that they would need to depend on their savings to pay for holidays, gifts to their children and unplanned expenditure. They were concerned with the paperwork and number of investment decisions they might have to make

Our clients knew that they would need to depend on their savings to pay for holidays, gifts to their children and unplanned expenditure. They were concerned with the paperwork and number of investment decisions they might have to make.

The solution:

We took the time to understand our clients’ aspirations and investment objectives, as well as the amount of risk they are willing to take on their investments. After receiving advice from their accountant as well as their Quilter Cheviot investment manager, they agreed they were happy to take a long-term capital growth approach with their portfolio given that they also have substantial assets including properties and cash reserves.

Our investment manager considered the couple’s overall financial position and ambitions, and recommended our discretionary service, using a cautious strategy for the investments. Through this approach, all of the paperwork and future investment decisions would be made by the investment manager, freeing up our clients’ time and taking away some of the stress associated with financial decisions.

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Top Tip

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Lee Goggin - Co-Founder

Lee Goggin

Co-Founder

The results:

The couple transferred their ISAs, share certificates, share scheme payments and a cash sum to Quilter Cheviot. Their investment manager reorganised these investments in a way that meets their objectives while also keeping their annual capital gains tax liabilities to a minimum. The portfolio is primarily invested in equities and, as the couple arranged to take a monthly income from the portfolio, part of this comes from capital gains. We also made arrangements for the couple to top-up their ISAs each year from the personal portfolio and have easy access to their savings when they need additional cash.

We also made arrangements for the couple to top-up their ISAs each year from the personal portfolio and have easy access to their savings when they need additional cash

A portfolio designed for their needs: Given the clients’ desire to use their savings to fund lifestyle activities, we have been managing the portfolio on a growth strategy that is diversified across assets, geographies and individual investments. Just 6% of the portfolio is invested in bonds and 3% is in alternative investments, such as infrastructure and private equity currently. The rest of the portfolio is invested in equities. Quilter Cheviot has been actively managing this portfolio since inception and recently reduced its exposure to commercial property assets, except for some specific exposure to UK-listed real estate investment trusts, or REITs. Finally, an investment was made into renewable energy. At all times, the focus has been on investing in assets that help our clients meet their investment objectives within their risk appetite.

At all times, the focus has been on investing in assets that help our clients meet their investment objectives within their risk appetite

Equity investments: Within the equity portion of the portfolio, 26% is invested in UK company shares, with the majority of this exposure through direct shareholdings, such as property company Segro and Experian, a credit score company. North American shares make up 32% of the portfolio, with the majority of the exposure through direct holdings, including Microsoft and Visa. The portfolio holds 8% in European shares, with some exposure to direct holdings, such as pharmaceutical company Roche. The portfolio also has holdings in investment trusts that have a global approach, such as Scottish Mortgage and Impax Environmental.

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Case studies can be an invaluable way to quickly see how a wealth manager has helped people similar to you. While details will of course remain anonymous, a prospective adviser should have abundant illustrations similar to this they can share.

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