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Bloomsbury discusses the various observations and conclusions with Paul and Karen, to identify how they feel about the available options. After discussing the pros and cons of a number of planning alternatives and considering the overall position, the trustees and their Bloomsbury planner formulate the overall financial plan incorporating the following main points:

• The purpose of the gilt portfolio is changed to one of meeting anticipated short term (next ten years) cashflow needs from the trust. The underlying investments are therefore changed to a series of index-linked gilts which will be held to redemption and which will provide cashflow at predetermined dates to meet these needs. Since they are to be held to redemption, there will be no ongoing management required (although the portfolio will need replenishment every time a stock redeems), they need not be subject to ongoing management costs and so all of the return is available to the trustees. The lower coupons compared with the previous portfolio also reduce the trustees' income tax liabilities.
• The two properties are to be sold (one is showing a capital loss, which partially offsets the gain on the other) as they represent too high a cost in terms of ongoing management and do not provide adequate diversification or liquidity. The proceeds are to be added to the long term portfolio.
• The remaining investment assets will be transferred to a consolidated nominee service provided by Bloomsbury's third party specialists. The funds are reallocated to a 60/40 equity/bond split to reflect the trustees' risk and return profile, since short term objectives will be catered for by the separate portfolio of index-linked gilts and cash. The long term portfolio is allocated to passive institutional pure asset class funds, which both reduces the risk inherent in holding direct equities and reduces the expense ratio from 2.9% to 1.56% - an annual saving of 1.34% - a saving which no longer needs to be funded by a riskier investment strategy.