you must review this at least yearly ,” said McPhail . “ This is especially true in volatile markets .”
ROLLERCOASTER RIDE It may seem that we ’ ve had little but volatility in investment markets this century and recent months have seen property prices swing wildly , a weakening of sterling after the vote to leave the EU and there are concerns of a coming correction in emerging markets .
Robertson says the only answer is to build a diversified global portfolio with risk levels that are appropriate for the client .
“ If clients are looking to retire at 60 , they still have a 20- to 25- year investment horizon and even low inflation chips away at your money ,” he explained .
“ You need to take a bit of risk , but we aim to generate returns that provide income and protect the capital value as much as possible .”
He says this means being as openminded in considering investment vehicles and pension products alike . Open-ended funds are flexible , but investment trusts are also good for generating income . Robertson also believes good old-fashioned distribution bonds – or even withprofit bonds – may have a role to play , so you shouldn ’ t dismiss them out of hand .
Trusts also offer an effective way of transferring assets between
“ Thankfully we seem to be moving away from the British reserve that doesn ’ t involve the family in financial affairs ”
generations , meaning it would be unwise to avoid them because of higher costs .
There may even be some margin in rolling over income into ISAs in order to maximise your fund while minimising your tax liability as you approach retirement , though many people choose not to do this .
Robertson has found many of his clients don ’ t want to generate their retirement income from property . Some of them have gone down this route in the past , but have decided the role of landlord isn ’ t all it is cracked up to be .
McPhail says property can be a useful income provider , but only as part of a diversified portfolio . Buyto-let is becoming less popular as a result of changes to tax treatments . A rental property can be a good investment , but you should keep
some money in an ISA or pension in case of damage or void periods .
“ If you ’ re relying on an investment property to provide income in retirement , that would be dangerous ,” explained McPhail . “ Not only are you relying on one asset class , but a single asset . You could find yourself highly exposed if something goes wrong .”
WHO SHALL IT SERVE ? While many people save for their pension without giving any real consideration about how to access this money , they are even less likely to consider who it will need to provide for .
Independent financial planning consultant Lisanne Mealing says retirement should be reviewed far earlier , not only by the saver , but by their partner who will benefit from it . Mealing says they should begin this process as early as their 40s or 50s – usually as their children get older – so they can work out what lies ahead .
This approach could prevent a situation Mealing witnessed when she met the wife of a client who was approaching retirement .
“ There was a definite atmosphere of hate in the room ,” Mealing explained . “ This was because the wife knew there was a pot of money and wanted to convert part of their house for her parents , while the husband wanted to travel and do all
4 trustnetdirect . com
you must review this at least
yearly,” said McPhail. “This is
especially true in volatile markets.”
ROLLERCOASTER RIDE
It may seem that we’ve had little
but volatility in investment markets
this century and recent months
have seen property prices swing
wildly, a weakening of sterling after
the vote to leave the EU and there
are concerns of a coming correction
in emerging markets.
Robertson says the only answer
is to build a diversified global
portfolio with risk levels that are
appropriate for the client.
“If clients are looking to retire
at 60, they still have a 20- to 25year investment horizon and even
low inflation chips away at your
money,” he explained.
“You need to take a bit of risk, but
we aim to generate returns that
provide income and protect the
capital value as much as possible.”
He says this means being as openminded in considering investment
vehicles and pension products alike.
Open-ended funds are flexible,
but investment trusts are also good
for generating income. Robertson
also believes good old-fashioned
distribution bonds – or even withprofit bonds – may have a role to
play, so you shouldn’t dismiss them
out of hand.
Trusts also offer an effective
way of transferring assets between
4
“Thankfully
we seem to be
moving away
from the British
reserve that
doesn’t involve
the family in
financial affairs”
generations, meaning it would be
unwise to avoid them because of
higher costs.
There may even be some margin
in rolling over income into ISAs in
order to maximise your fund while
minimising your tax liability as you
approach retirement, though many
people choose not to do this.
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