Trevor & Sue – The Case of Too Much Investment Risk

Trevor & Sue had recently sold their share of their business having worked hard building it up for over 30 years…


Aged 60, they had no children whom to pass on their hard earned wealth.  And now, like so many people, Trevor’s primary concern was to try to ensure a high return on his capital.


Trevor & Sue had already met with two financial advisers with a view to investing their money.  Each of these advisers put forward their recommendations based on the ‘risk /reward’ profile they had identified for them client at their first meeting.


As former business owners both Trevor & Sue had confirmed to these advisers that they were prepared to accept a ‘reasonable level of risk’ in order to obtain a good return on their hard earned capital. Trevor’s long held view was that “to accumulate, you have to speculate”!


So, in order to satisfy Trevor & Sue’s requirement for a high return both Advisers had recommended a similar, fairly adventurous investment portfolio which “matched their above average risk profile”.  Both portfolios suggested a very high proportion of monies to be invested in equities and other investments in an effort to secure a high return over the longer term.


Trevor & Sue were about to decide which Adviser they would invest with.


However, before investing their money Trevor & Sue were urged by a friend to speak with Endorphin Wealth.


Here’s what happened…


When we met with Trevor & Sue, we did the complete opposite to the other two Advisers. We focused our attention on Trevor & Sue, not their money!


We focused on getting to really know and understand Trevor & Sue, enquiring about the business they had built; when, how and why they started it; the trials and tribulations they had encountered along the way; the sort of things they’ve enjoyed doing in the past, what they now enjoyed doing – and what sort of things they wanted to do in the future.  We got to understand their fears and doubts and what was important to them about their future.


Through a straightforward process we then helped Trevor & Sue identify the cost of their desired lifestyle not only now, but over the various periods of their lives.  We then helped Trevor & Sue to consider and include into their planning certain additional financial goals and objectives that would make their retirement even more fulfilling and meaningful.


With a thorough understanding of their situation we then were able to demonstrate to Trevor & Sue that in order to prevent ever running out of money all they needed to achieve was a real rate of return on their money of just 1% above inflation.


With this knowledge, we helped them understand that the last thing they needed at this stage of their life was risk…


What they in fact needed was a lower return with much less risk; a prudent, tax effective portfolio which would give them the peace of mind they needed to enjoy their retirement – without constantly worrying about world share markets.


With recent volatility of share markets Trevor & Sue avoided the inevitable loss on capital that would have ensued had they invested with the other Advisers without knowing and understanding their full financial situation.


We saved Trevor & Sue over $200,000 of imminent losses that would have occurred had they invested through the other Advisers who did not do lifestyle financial planning.  Why take excessive risk when there is no need to do so?  Retirement should be a time to enjoy the precious time you have left.


Trevor & Sue continue to enjoy their retirement and we  continue to meet with them, to monitor their investments, review and update their financial plan and, more often than not, discuss how much more they can afford to spend to further enjoy their retirement and continue to be free of worry.


For Trevor & Sue, their big question was “Why didn’t the other two Advisers do this?”