Trevor & Sue had recently sold their share of their business having worked hard building it up over 30 years… Aged 60, they had no children whom to pass on their hard earned wealth. And now, like so many people, Trevor’s primary concern was to try to ensure a high return on his capital. Trevor & Sue had already met with two financial advisers with a view to investing their capital. Each of these advisers had followed strict guidelines and put forward their recommendations based on the ‘risk/reward’ profile they had identified for the client at their first meeting.
As former business owners both Trevor & Sue had confirmed to these advisers that they were prepared to accept a ‘reasonable level of risk’ in order to obtain a good return on their hard earned capital. Trevor’s long held view was that ‘to accumulate, you have to speculate!” So, in order to satisfy Trevor & Sue’s requirement for a high return both Advisers had recommended a similar, fairly adventurous investment portfolio which ‘matched their average to above average risk profile’. Both portfolios suggested a very high proportion of monies to be invested in equities and other volatile investments in an effort to secure a high return over a longer term. Trevor & Sue were about to decide which Adviser they would invest with. However, before investing their money Trevor & Sue were urged by a friend to speak with Premier Financial. Here’s what happened. When Premier Financial met with Trevor & Sue, we did the complete opposite to the other two Advisers. We focused ours attention on Trevor & Sue, not their money!
Premier Financial first of all focused on getting to really know and understand Trevor & Sue. Premier Financial enquired about the business they had built, when, how and why they started it, the trials and tribulations they had encountered along the way; the sort of things they’ve enjoyed doing in the past, what they now enjoyed doing – and what sort of things they wanted to do in the future. Premier Financial got to understand their fears and doubts and what was important to them about their future. Through a straightforward process Premier Financial then helped Trevor & Sue identify the cost of their desired lifestyle not only now, but over the various periods of their lives, allowing for inflation and the possible need for long term care. Premier Financial then helped Trevor & Sue to consider and include into their planning certain additional financial goals and objectives that would make their retirement even more fulfilling and meaningful.
Then Premier Financial set about producing a meaningful financial plan that would give clarity to Trevor & Sue and enable them to make smarter decisions with their money.
With a thorough understanding of their clients, and using sophisticated financial planning software and lifelong cash flow modelling techniques, Premier Financial was then able to graphically demonstrate to Trevor & Sue that in order to prevent ever running out of money all they needed to achieve was a real rate of return on their money of just 0.5% above inflation.
With this knowledge, Premier Financial helped them understand that the last thing they needed at this stage of their life was risk..
What they in fact needed was a lower return with much less risk; a prudent, tax efficient portfolio which would give them the peace of mind they needed to enjoy their retirement – without constantly worrying about world stock markets.
With recent volatility of equity and property markets Trevor & Sue avoided the inevitable loss on capital that would have ensued had they invested with the other Advisers without knowing and understanding their full financial situation. Trevor & Sue continue to enjoy their retirement and Premier Financial continues to meet with them on an annual basis, to monitor their investments, review and update their financial plan and, more often than not, discuss how much more they can afford to spend to further enjoy their retirement and continue to be free of worry.Back to Case Studies