How to Make the Market for Financial Advice Work - Case Study Example

• Executive summary

The method we employed in our wealth investment advice company, Wolseley plc, is a questionnaire to gather client’s information. The survey covers all the certain aspects required for a clear and correct investment advice. Any potential customer answers the questions and provides the advisers with a clue on their needs. Using the information presented in the questionnaire, the investment management officer formulates a unique and detailed advice. The information is dependent on the client’s interests and the amount of money he or she wants to deploy in any particular investment. The questionnaire presented to Mr. and Mrs. Smith provides a big column that gives room for detailed investment objectives and risk tolerance. These are key components in the questionnaire that provide unique responses, which need valid and subjective analysis before drafting any investment portfolio to help achieve clients investment needs (Sharpe 2011, pp. 11).

The finding from the inquiry shows that Mr. and Mrs. Smith want to be private investors. Mr. Smith is a working class earner; he earns £30,000 per annum while his wife is a poor working class, making £6,000 per annum. The Smith family has no dependents, which makes them eligible for saving a handsome sum of money from their salaries every year. Finding shows that the individuals have a healthy lifestyle as both of them are non-smokers, and they do not drink alcohol. The lifestyle prevents them from opportunistic diseases that come along with poor lifestyle behaviors as their ages advance. Subsequently, the risk of health-associated problems that might consume the pension is low.

In conclusion, for an investor success, the asset allocation should accommodate the personal goals and strategies. In the case of Mr. and Mrs. Smith, they have a perfect room for investment. At the age of 55 years, the couple aims at drawing much income from the assets and opting for less risk. The age consideration makes them more of conservative investors rather than aggressive. They are both 55 years and with a fix income security of £36,000 per annum and a possible saving £180,000 by the age of 60 and £432,000 by retiring age 67. A portfolio that aims to protect the current income from bonds and to provide long-term capital growth is advisable to the couple. It would make them potential to invest in high-quality equities.

I recommend for a conservative portfolio to the couple rather than an aggressive portfolio (Sharpe 2011 pp. 12). The portfolio should aim at high-quality assets and have low-risk tolerance. It should shield the fixed income the couple gets each year from bonds. The portfolio should break down different assets into subclasses to highlight the risks and potential returns. Furthermore, it should be analytic in nature and flexible to accommodate the inflations in the market that might change the initial weight of the investment (Hackethal and Inderst 2013, pp. 160). Buying shares from M&G Index Tracker would put the Smith family investment in small cap equities. It insinuates that the family investment is at high-risk tolerance as the shares of the company keep changing depending on the financial situations.

• Table of Contents

Executive summary2

Table of Contents4

Introduction5

Literature Survey5

I. Review Needs and Goals6

II. Time of Investment6

III. Investment Plan7

IV. Review the Salary and Diversify8

Body9

a. Methods and Findings9

b. Asset Choices10

c. Funds and Bonds10

d. Personal Report and Investment Plan11

Conclusion12

Recommendations13