I had breakfast this morning, sitting in the sunshine at Sydney’s Darling Harbour with one of my more successful colleagues.
She is responsible for a large suite of funds. New business is hugely intermediated. She is anxious to change that reliance. She wants and needs to go direct to spread her business risk.
We got to talking about advice and the notion of a default sequence for planning. I promised I would pull together a ten point list. It grew to 12.
My commonsense planning defaults for accumulator clients. Unless you have good reasons to do something to the contrary:
1. Save 20% of what you earn.
2. Have 6 months spending readily available in a cash account.
3. Invest the balance in a 50/50 growth and defensive portfolio
4. Be sure that the portfolio is widely diversified, highly liquid and marked to market.
5. Rebalance annually
6. Invest in low cost funds or main stream ETFs
7. Invest in passive rather than active funds
8. Manage personal and investment taxes
9. Do not borrow to invest
10. If you have dependents, insure for the value of your debts plus £500,000
11. Insure at least 50% of your income
12. Have an up to date will.
Do you agree?