The scenario you will be working with revolves around a High Net Worth couple who are...

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The scenario you will be working with revolves around a High Net Worth couple who are looking for advice The HNW couple are married with a son (30 years old, married with two children). The husband is a newly retired 65-year-old. He had a career in Banking. He has a Final Salary Defined Benefit Pension paying £60,000 per annum The (70-year-old) wife has a modest Final Salary Pension paying c. £10,000 per annum The couple own a (Mortgage free) 2-bed home in Belgravia London, currently valued at c.£2.0m The wife has just been admitted into a Care Home after suffering a heart attack & with acute mobility issues. The cost of this private care is £5000 per month Currently they have c.£2.0million in various (Investment & Cash) accounts between them. The husband is a potentially adventurous investor with some experience of the Financial Markets Client Objectives & Profiling 1. How much money is the Client thinking of Investing? £1.7m 2. What percentage of your current liquid (cash or cash equivalent) Assets does this represent? 85% 3. How long would you expect this money to remain invested? >10 years 4. What is the purpose of this Investment? In the short term, Income Generation to offset the cost of Private Health Care. Longer term, Wealth Preservation to enable as much as possible to be handed down as an inheritance. 5. How much of a drop over one year would cause you to ask us to sell and re-invest the proceeds in something risk-free? 20% 6. Has your attitude toward risk changed in the last five years? Somewhat more risk averse 7. If your attitude toward risk has changed recently, what has been the reason? Deterioration in the health of the wife & increased volatility in the Financial Markets 8. Do you intend to take a regular income from the Portfolio? Yes 9. How would you rate your knowledge of investing in Bonds, Equities, Commodities? Fair 10. Have you ever worked in the Financial Services sector? Yes You will create an Investment portfolio with an initial value of £1.7m that best meets the requirements and preferences of the HNW couple. Use your discretion to rank the couple's needs and explain your assumptions and reasoning. Write a report describing the Portfolio. The report's content will describe and explain the following (marks available in Red) • Client's (short & long term) requirements and preferences (10) Portfolio objectives & Investment strategy, e.g. active, passive, etc. (10) Portfolio composition and qualitative and quantitative reasons for composition, e.g. Asset Class and Investable Financial instrument characteristics (10) Selection and/or construction of an appropriate Benchmark (10) Portfolio's historical performance, both absolute and relative to the Benchmark (10) Use & explanation of Financial calculations to support decisions & analysis (10) General risks that may affect the performance of the Portfolio (10) • Predicted future returns (10) Reasons to expect future performance to remain the same, be worse or improve (10) Management, transaction, and administration fees will not be considered. However, Spelling, Grammar, Clarity & Report layout will be taken into account (10) Write in a commercial and non-academic style: Display information clearly and neatly using tables, bar charts, pie charts, and line graphs, etc. Understand the structure and operation of securities markets. Understand the nature of the risk/return trade-off and analyse its impact and treatment within the investment management framework. Understand and discuss portfolio objectives and the significance of the roles of betas, standard deviations, and the capital asset pricing model (CAPM). Understand, assess, and apply the principles of investment management in the context of ordinary shares (common stocks), with particular emphasis on stock valuation. Explain the attributes of bonds as fixed-income securities and issues in their valuation and pricing, with particular emphasis on yields and volatility. Understand issues in portfolio management, asset allocation, and portfolio returns. Understand the nature and characteristics of mutual funds, issues in their valuation and management, and their roles within investment portfolios.: The scenario you will be working with revolves around a High Net Worth couple who are looking for advice The HNW couple are married with a son (30 years old, married with two children). The husband is a newly retired 65-year-old. He had a career in Banking. He has a Final Salary Defined Benefit Pension paying £60,000 per annum The (70-year-old) wife has a modest Final Salary Pension paying c. £10,000 per annum The couple own a (Mortgage free) 2-bed home in Belgravia London, currently valued at c.£2.0m The wife has just been admitted into a Care Home after suffering a heart attack & with acute mobility issues. The cost of this private care is £5000 per month Currently they have c.£2.0million in various (Investment & Cash) accounts between them. The husband is a potentially adventurous investor with some experience of the Financial Markets Client Objectives & Profiling 1. How much money is the Client thinking of Investing? £1.7m 2. What percentage of your current liquid (cash or cash equivalent) Assets does this represent? 85% 3. How long would you expect this money to remain invested? >10 years 4. What is the purpose of this Investment? In the short term, Income Generation to offset the cost of Private Health Care. Longer term, Wealth Preservation to enable as much as possible to be handed down as an inheritance. 5. How much of a drop over one year would cause you to ask us to sell and re-invest the proceeds in something risk-free? 20% 6. Has your attitude toward risk changed in the last five years? Somewhat more risk averse 7. If your attitude toward risk has changed recently, what has been the reason? Deterioration in the health of the wife & increased volatility in the Financial Markets 8. Do you intend to take a regular income from the Portfolio? Yes 9. How would you rate your knowledge of investing in Bonds, Equities, Commodities? Fair 10. Have you ever worked in the Financial Services sector? Yes You will create an Investment portfolio with an initial value of £1.7m that best meets the requirements and preferences of the HNW couple. Use your discretion to rank the couple's needs and explain your assumptions and reasoning. Write a report describing the Portfolio. The report's content will describe and explain the following (marks available in Red) • Client's (short & long term) requirements and preferences (10) Portfolio objectives & Investment strategy, e.g. active, passive, etc. (10) Portfolio composition and qualitative and quantitative reasons for composition, e.g. Asset Class and Investable Financial instrument characteristics (10) Selection and/or construction of an appropriate Benchmark (10) Portfolio's historical performance, both absolute and relative to the Benchmark (10) Use & explanation of Financial calculations to support decisions & analysis (10) General risks that may affect the performance of the Portfolio (10) • Predicted future returns (10) Reasons to expect future performance to remain the same, be worse or improve (10) Management, transaction, and administration fees will not be considered. However, Spelling, Grammar, Clarity & Report layout will be taken into account (10) Write in a commercial and non-academic style: Display information clearly and neatly using tables, bar charts, pie charts, and line graphs, etc. Understand the structure and operation of securities markets. Understand the nature of the risk/return trade-off and analyse its impact and treatment within the investment management framework. Understand and discuss portfolio objectives and the significance of the roles of betas, standard deviations, and the capital asset pricing model (CAPM). Understand, assess, and apply the principles of investment management in the context of ordinary shares (common stocks), with particular emphasis on stock valuation. Explain the attributes of bonds as fixed-income securities and issues in their valuation and pricing, with particular emphasis on yields and volatility. Understand issues in portfolio management, asset allocation, and portfolio returns. Understand the nature and characteristics of mutual funds, issues in their valuation and management, and their roles within investment portfolios.:

Answer rating: 100% (QA)

Clients short long term requirements and preferences The clients needs and aspirations over the long term include the preservation of their money Because this client has more assets than a normal pers... View the full answer