Chris Justham, Relationship Manager at 7IM, says:
“A couple at this stage in their lives will likely be considering retirement in the not too distant future, so establishing what their objectives are, prior to any investment, is essential.
“Is there a need for the lump sum to generate income over the short to medium term, or is the goal purely to achieve growth for the future? This will have an impact on the make-up of any investment portfolio, as well as lead to further conversations around what realistic level of return that can be expected for the amount of risk that the couple are willing to take. Once a tolerance level has been established, it will offer greater clarity around what vehicle may be suitable.
“The adage of ‘eggs in baskets’ is still relevant, so broad diversification is key. An effective method of achieving this is within a collective investment fund. Seeking professional advice, to navigate what can be an intimidating universe is recommended here. This will also ensure that investments are structured in the most tax-efficient manner, making use of all allowances available.”
Andrew Gibbs, Investment Manager at Henderson Rowe, says:“A sizeable inheritance can make a substantial difference to a couple’s retirement, if carefully invested with a clearly defined long-term investment plan. Investment discipline is key.
“Financial history provides ample evidence that over the long term equities provide the highest returns relative to bonds and cash, but with higher short-term risk of loss.
“Market timing is incredibly difficult and to benefit from longer-term equity growth, investors need to stay invested in down periods. Easy to say, but harder to do when presented with a sea of red, especially as a novice investor. The greatest service that the experienced wealth manager can provide here is to counsel investors to focus on long-term objectives, rather than letting market noise pull them into investment after rallies and out after falls – the reverse of sensible long-term investing.”