The advice we provide is tailored to each individual client and their needs. We offer a comprehensive financial planning service, in addition to providing investment advice and portfolio management. As Independent Financial Advisers, we consider the whole of the market, both in terms of products and investments, thus ensuring that each client’s financial arrangements are the most appropriate ones available to them.
We take pride in this personal approach and ensuring that our clients’ needs are at the heart of our recommendations.
We begin by assessing a client’s current position, and understand what they want to achieve.
Where appropriate, we use sophisticated lifetime cashflow modelling tools, which allow us to confidently make plans that take into account future lifetime events, which may have a significant financial impact. We take into account a client’s attitude to risk and capacity for loss alongside their objectives and discuss options with clients before proceeding with our recommendations for a financial plan, supported by investment advice to ensure that expectations are realistic.
- Our Experienced Investment Committee meets regularly to discuss economic conditions and provide guidance as to how this should impact on our advice. We use a suite of resources to monitor and research investment options. Our risk-rated model portfolios are structured and managed by our in-house investment team under the guidance of the Investment Committee to meet various core investment strategies.
- Each Client Director together with their team, follows our laid down financial advisory process and is responsible for the advice provided to clients. The investment team provides research and valuable insight into the investment markets which guide the recommendations to clients for their portfolios.
There are many types of investment risk, and whilst effective financial planning may manage or minimise overall exposure to risks, they cannot be avoided completely. Indeed, it may be that trying to avoid or minimise certain types of risks leads to greater exposure to others. For example, one may avoid putting capital at risk by holding cash on deposit, but there is a real risk of high inflation and low interest rates eroding its purchasing power. There is a trade-off between risk and investment return. Therefore, it is important to understand that taking appropriate risks is a part of effective financial planning.
Furthermore, whilst blue chip FTSE 100 companies can provide a strong source of dividend income, mid cap and smaller companies, such as those listed on the FTSE 250 and their global equivalents, have historically offered greater growth potential. As with investments in general, asset allocation should be thought of as a long term strategy, with adjustments to take account of market conditions being made on a more gradual basis.
- Investment Vehicles. Our core approach, appropriate for most investors, is to use collective funds such as unit trusts and open-ended investment companies (OEICs). However, we also advise on investment trusts and direct holdings, such as individual equities, bonds and gilts. Since investment trusts usually trade at discounts or premiums to their net asset value, these can be more volatile than open-ended funds, but this can also represent an opportunity to achieve a higher return. As such, investment trusts usually require more frequent reviews. Similarly, individual equities are more volatile than collective funds and require regular in-depth reviews. For these reasons, including investment trusts or direct equities would usually be more appropriate for larger investments.
- Tax Efficiency. Another major consideration is the structure of investments from a tax perspective. There is a variety of different tax wrappers, each of which has a different treatment for tax purposes. Depending on the wrapper, gains may be liable to income tax, capital gains tax, be tax-deferred until a later date, or tax-free. Furthermore, it can be advantageous from a tax point of view for spouses to consider whether to hold investments jointly or individually. Pension legislation remains complex, and further reductions to annual and lifetime limits may catch many people unaware. This highlights the value of conducting thorough financial planning reviews for individual clients on a regular basis.
Costs are an increasingly highlighted component of investment returns. The requirement imposed by the regu-lator for greater clarity and transparency regarding charges has led to increased competition within the industry and pressure for the charges paid to fund managers and platforms to be reduced. One of the many benefits of our independence is to allow us to select the most appropriate solution available from the whole marketplace, bearing in mind both the level of service provided and its cost-effectiveness.
- Like many other professionals, our annual management costs are calculated based upon time expended, transaction speeds, complexity of work and the amounts invested. Regular reviews are important to ensure that investments remain appropriate, and to ensure that our understanding of each client’s situation remains up to date.
It is important to note that investment performance can result in many percentage point differences in returns but charges, in general, are measured in fractions of percentage points. Thus we encourage the focus for clients to be more on investment returns rather than on charges, albeit these should be carefully monitored.