Personal injury settlement

Lump sum investment

One of our Professional Partners was appointed to oversee the management of a lump sum settlement awarded to a young father whose injury was so severe he was unlikely to work again. The money had already been invested.

Our Professional Partner wanted a second opinion to confirm whether the investment portfolio was appropriate.

We reviewed the portfolio to discover it had been constructed using an unsophisticated scoring of the beneficiary’s risk tolerance. No other factors seemed to have been considered when determining the mix of investments.

Neil undertook a more robust risk profile analysis using a Lifetime Cashflow Model. He found the portfolio was much riskier than the holder’s stated risk tolerance and there wasn’t enough diversification.

It’s not about the return, it’s about risk tolerance

We recommended a low cost asset class portfolio that utilised index tracker funds. It’s not designed to achieve the highest investment returns possible but to generate the returns needed to achieve the young father’s lifestyle needs whilst maintaining financial independence.

There is a much clearer understanding of how the settlement will support short, medium and long-term goals with the least risk to the capital invested.

Professional Partner piece of mind

Our Professional Partner is now confident that the requirements of the Trustee Investment Act are being met, particularly the standard investment criteria of suitability and diversification.

Lower costs preserve more capital

The substantial reduction in investment costs in terms of both product charges and adviser fees means that more of the capital remains invested for the benefit of the young father and his family rather than for the benefit of the financial services industry.