Balancing risk and aims

ANGUS MacDonald (50) is a solicitor who runs a small family law firm in Aberfeldy. He is married and has two children, Robert who is 24 and employed as a Chartered Surveyor in Edinburgh and Susan who is a medical student at Aberdeen University. His wife, Margaret, is a full-time housewife but also does some voluntary work for a local charity.

Over the years, MacDonald has accumulated an ad hoc collection of self-employed annuity contracts and personal pensions, the majority of which have been last-minute purchases before the tax year end. As a consequence there is no real structure to his investment strategy. He has recently consolidated his various pensions into an investment only self invested personal pension (Sipp) with Hornbuckle Mitchell – an independent trustee company. To his surprise the current value of his fund is £300,000.

He is seeking advice on how to construct an investment portfolio that will meet his long-term objectives and match his risk profile. He plans to retire at 60 and would ideally like to have an income in retirement of around £50,000 per annum. He is naturally cautious but realises that he may have to increase his exposure to risk to meet his long-term goals. He plans to contribute £10,000 a year.