Case Study – Tax efficient investments and savings

Background

We were approached by a married couple in connection with various investments they had transacted over a number of years.  They had both recently retired and wanted more control of their financial objectives.  The capital was invested mainly in collective funds such as OEICs and Unit Trusts which also included a significant ISA portfolio.

Challenges

• Additional income – We established that client retirement income was more than adequate to meet daily requirements.  Further cash reserves provided cover for contingency purposes.  Additional income was desirable to fund their interest in travel given the additional time available post-retirement.
• Current Portfolio – The current portfolio was disjointed and in many areas inflexible particularly in relation to ISAs and the range of funds available.  With reference to the respective sector benchmarks, it appeared that many of the funds had underperformed significantly.
• Risk – The client had little idea as to where their capital was being invested by the individual fund mangers and whether in turn they were being exposed to undue risk. 

What Taylor Patterson did

Having clearly established the clients’ needs and requirements and existing investments, we undertook a risk assessment which provided guidance as to how we could remodel the existing portfolio.  The key consideration was the need to generate additional income which we set about achieving by means of securing a good dividend income stream and a range of funds which could potentially benefit from strong capital growth over the mid to long-term.

We advised the clients to establish an investment platform.  This is an arrangement whereby various collective funds can be registered under one facility which in turn can provide the client with benefits such as online valuations , portfolio information and the means to switch efficiently.  Once the various collective funds and ISAs had been re-registered, we set about making the necessary adjustments so that the portfolio was aligned within an acceptable tolerance to risk.

The Results

From a point whereby little information was provided other than half-yearly statements, the clients were now provided with the means of tracking their investments online which in turn led to more informed discussion with their Taylor Patterson Adviser. 

The clients were comfortable with how their capital was invested and had a far greater understanding of the principals of risk and reward.

The overall result was that the clients felt in control of a significant element of their personal wealth with the resultant confidence to make more informed decisions regarding their short to medium term plans.