1	Wealth Check- a case study
2	The Investors Pauline and James Retired £1.8 million invested £50,000 annual pension
3	Financial Goals Basic living costs £ 38,000 annually Dining, opera, golf £ 7,000 annually New car for James £ 20,000 every 3 years New car for Pauline £ 25,000 every 4 years European holidays £ 5,000 annually Long haul travel £ 10,000 every 2 years These are the financial goals of Pauline and James in order of priority. Have you made a prioritised list of your own financial goals?
4	Cost of financial goals This shows the future annual cost of their financial goals, with the “nice to haves” piled on top of the “must haves” in order of priority.
5	Drawings from Investments Their pensions are £50,000 p.a. gross, so here are the additional amounts Needed to meet all their financial goals, adjusted for inflation. These will be funded from their investments (as capital and income). See how they vary. Have you quantified what you want or need from your portfolio?
6	Investment Risk Risk and return are related. We take great care to help all clients set their tolerance to investment risk. James and Pauline have chosen their risk preference, which also determines their personal “expected return”. How risky is your existing investment mix and is it really suitable for you?
7	Required Rate of Return The blue line is the expected average total investment return for James and Pauline, set by their risk profile. The yellow boxes on this chart show how adding each goal in order of priority increases the investment return required from their portfolio. It looks like they should be able to meet all their goals. Should you take more or less from your own portfolio, or review your priorities? In a real case we would show and discuss the actual rates. They are omitted here for regulatory reasons.
8	Range of investment outcomes This fan chart shows the range of likely future values (in today’s money) for a portfolio with their risk profile, after all the drawings shown earlier. This chart looks different for every investor, depending on individual risk profile and cash flows. It is one of several diagrams in the report (not shown here) that stress test how likely your portfolio is to survive everything you ask of it.
9	How do we use all this?
10	Regulatory