Lump sum investment

jazz_drummer

hi all,
what advice would you have for a relative who has inherited a lump sum and asked me for advice?
They are not working, their financial affairs are ultra simple. And the financial planning needed is minimal. So I am not sure whether to point them at an IFA.
They want to keep some close to cash (instant access) and invest the rest, which sounds sensible....But in what?
There's thousands of potential funds/bonds/EISs/onshore/offshore etc. 
Anybody out there had a similar experience or could offer any advice?
Thanks and happy New Year all

jimjames

Really depends what they want to achieve with it and what they mean by lump sum. Some people would call £5k a lump sum, others it might be £200k. The answers would be quite different.

jazz_drummer

Thanks Jim. Good point.
Looks like it could be in the £50-100k range. 

dunstonh

There's thousands of potential funds/bonds/EISs/onshore/offshore etc. 

With 50-100k, EIS and onshore and offshore bonds are unlikely to be suitable.

eskbanker

https://ukpersonal.finance/flowchart/ is perhaps a reasonable place to start, identifying a structured assessment process to evaluate options, albeit light on detail when reaching the end - there does need to be some assessment of timescales, objectives, risk tolerance, etc, before deciding on investment strategy, choice of wrapper (e.g. pension or standalone investment in ISA/GIA, etc), long before selecting specific products....

Mark_d

I think it would be difficult for anyone to give good suggestions without knowing a lot more about your relative's financial situation.

If they have a healthy cash balance already and no plans for extra spending, then why keep any of the inheritance in cash?

If they receive state benefits then the inheritance might have implications for the benefits, depending on what is done with the inheritance.

Some or all of this inheritance could possibly be added to a pension fund.

If the relative has a long life ahead of them then maybe invest in a riskier fund with more growth potential.  Otherwise it might be advisable to keep a high proportion in cash/bonds.

If the relative would benefit from an extra income, maybe invest in a fund that pays an income.

As you can see there is a lot to consider and there are a lot of options.  An IFA would be best placed to advise, and account for your relative's attitude to risk.

Albermarle

jazz_drummer said:

hi all,
what advice would you have for a relative who has inherited a lump sum and asked me for advice?
They are not working, their financial affairs are ultra simple. And the financial planning needed is minimal. So I am not sure whether to point them at an IFA.
They want to keep some close to cash (instant access) and invest the rest, which sounds sensible....But in what?
There's thousands of potential funds/bonds/EISs/onshore/offshore etc. 
Anybody out there had a similar experience or could offer any advice?
Thanks and happy New Year all

As others have said there is no one size fits all. 
The persons age and what there long term plans are for it are important in deciding what to do.( spend it/ use it to supplement retirement income/give it away/pay off mortgage/move house etc etc)

There are thousands of investments out there, but nowadays there are plenty of simple cheap options aimed at the small/medium sized investor. Normally there is no need to get involved with offshore funds, EIS etc.even if you have a lot more than £100K.

xylophone

How old is the relative?
State pension position?
Private pension provision?
Married or unmarried?
Using full ISA allowance?
Any means tested benefits?