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The Accountant
The analysis

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Sophie attends an initial meeting with one of Bloomsbury's Certified Financial Planners. At this meeting the planner explores her goals and values, particularly towards money.

Sophie then completes a psychometric risk-profiling questionnaire, which Bloomsbury analyses to understand her attitude to risk. This allows the planner to understand the maximum risk with which Sophie can be comfortable and thus the likely return that she might reasonably expect consistent with that.

Bloomsbury collates Sophie's personal data, including a detailed breakdown of her annual expenditure habits, to calculate the actual return that she needs to achieve on her long-term capital, given a number of agreed assumptions. The required return is some way below the expected return that her risk profile will allow, so it appears that she can achieve her goals comfortably and so can probably afford to take a lower risk with her investment strategy, fund a higher annual lifestyle expenditure, gift capital from capital/income or a combination of all of these. For the first time Sophie feels that she understands the 'big picture'.

Bloomsbury makes further observations about Sophie's situation as follows:

• Sophie can afford to achieve a negative investment return each year and still achieve her goals.
• Despite her mortgage and dependence on earned income, she does just have enough assets to remain solvent even if she suffered a period of long term incapacity.
• She could also afford to meet any long term care costs that might reasonably be expected to arise so no action would be required at this time.
• Her investment portfolio is somewhat undiversified, as 80% of her equity investments are in the shares of three banks, which is increasing her risk exposure significantly. In fact, she need not have this level of equity exposure at all and a portfolio of index-linked gilts would provide more return than she needs.
• Although she is not paying fees for management of the portfolio, she does not have the time or inclination to run it herself.
• She is receiving a lower net return on her cash held on deposit than she is paying on the mortgage on the Spanish property.
• One of her retirement annuities and one personal pension are unit-linked but the others (totalling around £1.3m) are in with profit funds.
• One of her retirement annuity contracts, worth c.£0.5m, are not in trust and so this value would form part of her estate on death before she draws benefits.
• She has sufficient capital in her pension fund to make further contributions unnecessary based on the agreed assumptions. To avoid an excess charge of 55% on the value of funds in excess of the lifetime limit on election for enhanced protection, an election for enhanced protection would be required.
• Her financial position would allow her to afford to take a sabbatical or to reduce her working hours in order to reduce the stress she experiences at work.
• Approximately one third of her estate is currently likely to be paid as inheritance tax were she to die today.