My husband died recently, leaving everything to me. I’ve been going through his financial files and I see that he has a large portfolio of shares, most of which are with big US oil companies. I don’t feel very comfortable keeping all my money with them, both from a green perspective and because it seems risky to have so much riding on one type of company. What do you think?

Phil Beck of Smith & Pinching responds:

It sounds like you would benefit from taking some independent financial advice about your inherited investments. A portfolio that worked for your late husband may not be suitable for you in terms of your preferences, such as green credentials, and the level of risk.

My other concern is that you appear to have a significant portion of your wealth invested in a single type of investment asset. For the vast majority of people, we would recommend diversification – following the old adage of not having all your eggs in one basket. Spreading your wealth across a range of investments will help to avoid concentrated pockets of risk and may make your portfolio more resilient to changing markets.

It also sounds like you have specific shares, directly purchased, rather than using investment funds. For many investors, investment funds will be a more suitable solution. They hold a range of assets, usually with a common theme such as an industry sector or a geographic region, but the key point is that there will be a mix of shares within the fund, which will once again help to spread your risk. There are a number of funds that require their holdings to meet ethical standards, for example, so you can pick and choose according to your wishes.

It is critical that you understand the level of risk that you are taking with your investments and that you are comfortable with that strategy. Different types of investment assets have different levels of risk and you can tailor your portfolio to match the level of risk that is right for you.

The first question I would ask you, if we were to meet to discuss your finances, would be: what are you looking to achieve with your investments? Once we have established your goals for your investment strategy, we can then look at a suitable portfolio of investments that would help you achieve them.

Any opinions expressed do not constitute advice. The value of your investment can go down as well as up and you may get back less than the amount invested. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.

For more information, please visit www.smith-pinching.co.uk