Financial adviser for 85 year old widow with significant assets

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Reuben321

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My eighty five year old mother has recently inherited significant assets from my father. The assets are mainly comprised of property, shares, pension,a business debt and bank accounts.

One of the shareholdings has been compulsorily sold and she now has a very significant sum to invest in a low risk investment/ account. She needs advice on what to do with the money and a recommendation on a good completely independent financial adviser she could contact or that I could contact on her behalf (I have authority). She does not need to touch the lump sum at the moment as she has enough to live on with the pension and bank accounts but may possibly need access to some of the money if she required expensive nursing care at home or in a nursing home. She has a health policy of she needs care in a hospital. She doesn't want to lose any of the money so any investment would need to be secure and low risk. I would appreciate your advice.
 
Steven Barrett said:
All advisors should tell an 85 year old the same thing, leave it in cash.
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I would disagree strongly and so would many others.

Key Post - "Should the elderly be less conservative investors?"

There was an excellent article by Eamon Porter in the Sunday Times on this topic. As the ST is not available online, you can read a similar version on the author's blog https://www.aspire-wealth.com/about-aspire-wealth-management-dublin/
www.askaboutmoney.com

Reuben - your mother's investment horizon is that of her children if we assume that they will inherit the money on her death.

Therefore her horizon is long-term. And she should probably be fully invested in equities.

The state pays for the nursing home fees of people who can't afford them. So this should not worry her.

However, she could use her money to provide for her care at home.

It is probably that she owns a valuable home mortgage free and now she has "significant assets" as well.

A key issue for her children is that when she dies her Capital Gains disappear as death is not a disposal for CGT purposes. Yet another good reason for investing in shares.

In terms of an advisor, I would recommend Eamon Porter who wrote the above mentioned article.

about aspire wealth management - Aspire Wealth Management

About Aspire Wealth ManagementAspire Wealth Management Ltd is one of Ireland’s leading fee based personal financial planning firms and is based in Stillorgan, Co. Dublin.Our area of expertise covers Investment, Retirement Planning, and Estate Planning. In particular, we have extensive experience...
www.aspire-wealth.com

Brendan
 
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Steven Barrett said:
All advisors should tell an 85 year old the same thing, leave it in cash. That is whether it is with State Savings or elsewhere.


Steven
www.bluewaterfp.ie
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I wouldn’t agree with this at all.

If it’s surplus cash, it should be thought about from a succession planning perspective.

It’s too simplistic to assume low risk investment for older people.
 
That's fine to disagree with me. From a Central Bank regulatory perspective, it is proceed with caution with someone of that age. Too many pitfalls to look out for. A life company for example will not take business off someone over the age of 75.
 
Fair Deal scheme... Assets include equities, family home, land etc

Income includes dividends, pensions, social welfare payments etc
 
Steven Barrett said:
That's fine to disagree with me. From a Central Bank regulatory perspective, it is proceed with caution with someone of that age. Too many pitfalls to look out for. A life company for example will not take business off someone over the age of 75.
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“Proceed with caution” is a long way from “All advisers should tell an 85 year old the same thing, leave it in cash”.
 
Gordon Gekko said:
“Proceed with caution” is a long way from “All advisers should tell an 85 year old the same thing, leave it in cash”.
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It's not that far away.

Brendan Burgess said:
With respect Steven, I would not be giving any credence to the Central Bank's views on investment.

Brendan
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That may be the case for you Brendan. They are my regulatory body and I cannot simply ignore what they say.
 
I strongly agree with Brendan and Gordon's comments above on this thread. "All advisers should" suggests only a singular course of action is appropriate which just seems silly. There was me thinking that financial advice was bespoke as in tailored to your needs;)
 
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Steven Barrett said:
They are my regulatory body and I cannot simply ignore what they say.
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If the Central Bank says that the only appropriate investment you can recommend for an 85 year old is cash, then your representative body should challenge this.

So to reply to the original questioner, it seems

1) Your mother should invest in a diversified portfolio of shares
2) Don't go to an investment adviser because they cannot give you the right advice due to the stupid regulatory system we have in this country.

Brendan
 
Brendan Burgess said:
1) Your mother should invest in a diversified portfolio of shares
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So if she suddenly dies or suffers a health reverse warranting long-term nursing care (not exactly a remote possibility for an 85 y.o.), her relatives will be facing the prospect of liquidating volatile shares at a time not of their own choosing, either to process her estate or pay for Fair Deal care?

I thought it was precisely to avoid such a nightmare scenario that people engaged investment advisors.
 
Thank you everyone for your advice. I am very grateful. She would be prepared to take a small bit of risk but really she wants to protect the capital as far as possible and yes, she is planning on passing it on to her children eventually if she doesn't need it.

I am not sure she would be that comfortable with buying shares with it but if she is, do you have any recommendations on who she should contact to get advice on this ?

If she leaves it in cash, would it be best in State Savings or is there a limit and should she divide the amount over several accounts?
 
T McGibney said:
her relatives will be facing the prospect of liquidating volatile shares at a time not of their own choosing, either to process her estate or pay for Fair Deal care?
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Correct.

Processing her estate is not a problem. She will have escaped CGT. And when the shares are sold, if they think that the market is too low, they can reinvest. I assume that the Executor can actually transfer shares to a beneficiary?

Or she can watch it being steadily eroded by inflation.

There is no risk-free option for anyone.

The best balance of return and risk is a diversified holding of directly held shares.

Brendan
 
Reuben

Another issue that a financial advisor should raise with you is the benefits of gifting some of the money now. For example, if her children or grandchildren have mortgages, it would make "familial" sense to gift them money to pay off the mortgages.

I hate seeing situations where parents have money on deposit at 0% which their bank is lending on to their children at 4.5%.

Brendan
 
It would be a good idea to gift to her children now as they all have mortgages but I don't think she will go that way as she wants to give property to some of the children and cash to the others and she would not want to do all that now even though it makes sense.
So it is likely that she will put it in State Savings and possibly would consider the share option if she got a good broker and financial adviser to assist her. Any other recommendations would be welcome. Thank you everyone for your help.
 
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Point out to her that investing in State Savings is very risky. We have inflation of around 10% which means while €80k might buy her a year in a nursing home today, after 4 years, the price could rise to €120k and her €80k in state savings might have risen to €82k.

Brendan
 
Brendan Burgess said:
Point out to her that investing in State Savings is very risky.
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Sorry Brendan but that’s just silly.

Inflation impacts the real value of all assets.

Equities are not magically immune from inflation. Look at how equities performed in the 1970’s. Or year-to-date

An 85 year-old has a pretty limited life expectancy. Too short a time horizon to start compiling a stock portfolio.
 
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