Location: Epsom

Client: Older couple, (68 and 70 years old), no dependents.

Problem: They read the financial pages in the weekend papers, and have made investment decisions for their yearly ISAs based on what they have read. This means that their portfolio consists of "Flavour of the moment" funds and investment sectors. They didn't consider their other investments when making the new ones. As a result this means that once analysed, they were actually heavily invested in emerging markets, an area which does have great potential for returns over the longer term, but also carries a very high investment risk.

The client came to us as they wanted to start taking an income from their investments, which had grown to £250,000 jointly.

Solution: The first thing that we did was to determine the clients attitude to investment risk. Instead of asking the clients to choose a number between 1 and 10, we use a series of questions which will determine the tolerance for risk. Once we have that we can determine the best split for the clients' investments for the optimum diversification of risk.

As you may expect, their attitude for investment risk was lower than their current holdings, and were actually classified as a Medium Risk investor. They wanted long term income (and growth if possible!), but with out too much exposure to short term volatility. Once this was determined, we then rebalanced the portfolio moving a large amount of the money out of emerging markets, and into lower risk investments, also diversifying the portfolio in the process into other asset classes and global areas.

Benefits: The clients now have a fairly steady income stream, and have an investment portfolio that won't fluctuate in value as much as their previous one.