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FINANCIAL PLANNING AND WEALTH MANAGEMENT
Finance & Accounting
Pages 12 (3012 words)
FINANCIAL PLANNING AND WEALTH MANAGEMENT Table of Contents Introduction and Background of the Case 3 Part 1: Identification of Appropriate Investment Options 4 Part 2: Critical Evaluation and Justification of Alternative Investments 9 Conclusion and Recommendation 14 References 16 Introduction and Background of the Case A portfolio is group of securities such as bonds, stocks, commodities, and derivatives where an investor invests his or her money to mitigate the risk of holding a particular asset through diversification.
Investing the entire sum of money in a single stock exposes the investor to the risk of that asset. So, in case when the price of that security falls in the market due to any reason, the investor will suffer huge losses. This, risk of concentration of money in a single stock is mitigated through diversification. As per the preliminary interview conducted with a married couple named Kevin and Katia we came to know the following details: Katia aged 43, is a primary school teacher earning ?35,000 per annum and contributes 7.6% of her gross annual salary to the Teachers’ Pension Scheme. Kevin aged 45, is a construction site project manager earning ?80,000 per annum and contributes 6% of his gross annual salary to a defined contribution scheme. The couple has two children – Tilly and Jemima aged 7 and 9 years. The couple seeks advice for their retirement planning that is after 17 years when Katia is 60. The couple would like to achieve a combined retirement income of approximately ?45,000 in today’s terms. ...
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