01732 760000 info@strategic.uk.net


As our existing clients will know our investment philosophy is centred on the fact that most active fund managers fail to consistently outperform the market, and therefore fail to justify the additional expense associated with active fund management.

Academic research dating back over 60 years shows that investors have been rewarded for time in the market, rather than trying to time the market. Diversification, taking a disciplined approach to trading, and keeping costs down, have all been contributing factors to a successful investment experience. This can be achieved by taking a more passive approach to investing, rather than trying to identify the active fund managers with the best chance of outperforming the market, and then timing the switch to the next manager, when the first starts to underperform.

So when it comes to investing, in our opinion passive is the way to go. However, this doesn’t mean we are permanently wedded to everything passive.

An area where the majority of people adopt a passive approach, but could benefit from being more active, is with meaningful gifts to charity. In our experience people who want to pass some of their wealth or assets to charity do so via their will, passively once they have gone.

This has potentially 3 downsides:

  • They miss out on the opportunity to witness the impact and difference their money makes to the lives of others through their donation.
  • They are unable to hold the charity accountable for how they use their donation
  • If the donation is delayed until after your death, it’s is not 100% guaranteed that your wishes are carried out, as your other beneficiaries may dispute the will.

Writing out a cheque during your lifetime eliminates all 3 of the above negatives, so why do so many people still leave it via their will? It’s appears the biggest barrier is the fear of giving away financial assets, and then not having enough to maintain their lifestyle and standard of living in later life.

This is a perfectly reasonable and understandable concern, but again help is at hand. Having helped clients successfully transition into retirement and then continue to advise them throughout their retirement years, we have made a number of observations.

Firstly when it comes to estimating future expenses in retirement, many fall into the trap of assuming that (after allowing for inflation), their expenditure will be pretty constant throughout their retirement years.

The reality is quite different. We observe that retirees have the potential to pass through up to 4 different stages within retirement. Each stage has different characteristics and differing effects on our finances and spending habits.

How long each stage lasts, depends on a number of factors, not least your state of health, but, your expenditure will change. There will inevitably become a stage where you start to slow down, do less foreign travel, and simply not go out as much. Health plays a big part in determining when this might happen, but rest assured it will.

This slowing down phase coincides with less expenditure, so those that have budgeted for a constant outflow throughout retirement, find in later years they are not spending at the same rate and therefore retain more capital than planned.

By engaging in a financial planning process, (which should be reviewed at least annually) this surplus capital can be identified, and enable a lifetime gifts to be made with confidence that sufficient financial resources will remain.

One final benefit of making lifetime charitable gifts. We often talk about money values, and passing down these values that have served you well to the next generations. Engaging children and grandchildren in the grant giving process, provides the ideal environment to talk about your money values and impact your knowledge and experience on the younger members of your family.

If you wish to explore whether you have the financial capacity to make lifetime gifts, or simply you want a second opinion on your retirement plans, please do get in touch.

T 01732 760000 or info@strategic.uk.net