Reference no: EM133331533

Case Study: You've been asked to manage the Inger family account, which is a new relationship for your firm. They have no stated investment policy or guidelines. Peter and Hilda Inger have been married for 37 years with two children, Christa and Hans, aged 25 and 30. Peter Inger, 59, is a successful entrepreneur who founded a boat manufacturing business, Inger Marine, when he was 23 years old. He has worked compulsively to build the company into a producer of luxury pleasure boats sold worldwide, but he is now considering a business succession plan and retirement. Peter believes he can sell his business in the next 3 months $5 million. Hilda Inger, 57, comes from a wealthy family. Since her marriage to Peter, she has been a housewife and mother to Christa and Hans. Hilda is the beneficiary of a trust established by her family. Throughout her lifetime, the trust will distribute to her an inflation-indexed annual payment (currently $75,000), which is taxed as personal income. At her death, payments will stop, and the trust's remaining assets will be transferred to a local charity. Peter is a perfectionist and likes to maintain control. He has consistently been averse to risk, leverage, and change, both in his company and in his personal life. Peter already holds a position in gold bullion, which he intends to hold for the foreseeable future. His goal is to maintain his standard of living. Hilda is risk neutral and doesn't have a financial background in business or personal finances. Hilda would like to build a new home once Peter retires. She figures that the sale of their current home could pay for the new build. Things to think about: - Look at their total level of wealth. They are giving you $100,000 to try you out.

Question: How will you manage it? - Look for keywords, what is their main objectives? Do they differ between the two? Can there be compromise if different? What would you recommend and why? - Will your recommendation differ with this money vs. the money they will get from the sale of the business? Look at the total portfolio make up of all their assets, are they overexposed to a particular asset class? How will you diversify it?