Providing independent financial advice for over 20 years
If you have never invested before we understand that this can be scary and a soupçon of intelligent fear is both understandable and prudent. We do not lean on people to invest – this would make our reputation suffer. When we help clients to invest it is with mutual benefit in mind – you need to benefit and we need to get paid. We suggest you read through as much of this website as possible (given you may be investing the fruits of several years labour this is really a good idea) and then email us to arrange to have a chat.
As a starting point you may wish to note there are different types of advisors – we specialise in investment work – for more on choosing an advisor see the following page.
Scroll down to the 'How do we work' section below.
We are happy to have the first meeting at your home, or via Teams / Zoom or you can visit us. Following this we will provide a simple report to you that outlines what we can do to help and what we will charge for doing it if you agree.
We will not charge to review your current investments but will quote you a fee if you wish for us to take them over.
HOW DO WE WORK?
This is what our customer journey looks like:
We ask, what do you want?
This is the first (often difficult) question we ask followed by lots of other questions, broken down into ‘Hard Facts’ and ‘Soft Facts’
‘Hard Facts’; these are factual facts, for example your name, date of birth, income, expenditure, assets, liabilities etc. etc.
‘Soft Facts’ are more concerned with your aims & intentions, aspirations and feelings. Examples would include inheritance planning, family issues etc.
We will from the above decide whether our specialism is suited to you. If we feel your needs are in line with what we specialise in we will provide a broad overview of your situation and make outline suggestions. We will also specify what we propose to charge if you decide to proceed. More information about this can be found in our Costs section.
If you agree with the proposals and costs detailed in the Strategy report we proceed to draw up a bespoke investment plan for you.
It is important to regularly review investment portfolios to ensure that they continue to perform and to meet your needs - we will agree a review schedule with you at the outset.
Where your money is held
We do NOT directly handle your money, instead we use a large number of reputable and long established fund houses to build bespoke client portfolios. Your money is invested via several different providers into a range of funds, think eggs and baskets. You will have online access to your portfolio 24/7. We will agree a schedule of regular reviews with you and when we feel that there is some adjustment necessary we will agree it with you before actioning.
Leave the money in the bank or invest?
The starting point is the comparison between asset backed investments and deposits. Asset-backed investments are those which are backed by a company's underlying assets. Examples of funds using asset backed securities are Equity (share based) funds, Property funds and Fixed interest funds. Please also refer to our commentary on asset classes.
Why asset backed investments (over time) often better deposit returns...
Banks and commercial lenders need to make a profit on their lending – they must lend out money at a greater cost than the interest that they pay to depositors.
Businesses almost always have ‘gearing’ – they borrow money to trade. Businesses over time must earn a greater rate of return than that they pay on the money that they borrow, otherwise they will fail. Thus over most five year periods during the last 80 or so years the returns from asset backed investments have outperformed cash (deposit based) returns.
On balance a portfolio of asset backed investments offers the best chance of out performing deposit based holdings and, importantly, out performing inflation - provided that it is held for a reasonable period of time.
It is of course always necessary to leave some funds on deposit (cash based) for emergencies and planned expenditure.
We describe the categories of investment as “Asset Classes”. The foundation of investment planning is the asset allocation decision - what percentage of funds are to be placed under which heading. The main asset classes are:
Cash / Deposits – characterised by security of nominal capital values but returns are limited, particularly in real terms, that is to say compared to inflation.
Fixed Interest – generally provide security of income, particularly in nominal terms with exposure to capital gains or losses.
Equities (Shares) – characterised by insecurity of both income and capital values over the shorter term, but offering a much higher probability of producing real growth (over inflation) over time in both income and capital.
Property – both residential and commercial property have proved to be a reasonable long term hedge against inflation and provide diversification from the other asset classes. The problem with specific property purchase is high cost and limited diversity.
Derivatives – generally characterised by highly leveraged gains or losses but can offer risk management (example hedging) at a cost.
We manage risk by using combinations of the above asset classes. It is vital to select the correct vehicle for managing and reviewing any non-deposit investments selected because it is necessary to be able to carry out fast and detailed reviews of investments.
RISK & RETURN
Risk has been described as the “uncertainty of loss or profit”. Risk is a huge subject in its own right and one that needs extensive discussion.
The objective of portfolio building is to construct a portfolio that maximises the return for an appropriate level of risk – hence the name of our website.
Some of the things that determine risk include:
Timescale: if you need the money in six or twelve months, then you should not be investing. Clients who are at or approaching retirement will generally tend to have a far lower overall risk profile than those who are younger.
Tolerance for risk: this is subjective; for example if you have never invested before you should typically approach with caution.
Capacity for loss: If for example you have very little income (employment, pensions etc) and what you are proposing to invest is needed to support your lifestyle this would suggest a lower risk approach.
Amount available: If you have a modest amount only then you may not have sufficient over and above necessary emergency funds to invest on an advised basis. As a guide we start providing bespoke advice at £250,000 plus.
This is a complex subject and we will talk through the appropriate profile to target with clients. There are many ways of achieving the correct overall risk profile. If for example a client instructs us to place funds at a medium risk level then we could just follow this instruction. Alternatively the investment could be split with half below medium risk and the other half above – resulting in an overall (averaged) correct risk profile and there are good reasons for taking this latter approach.
As a starting point we use an illustrative ‘Staircase of Risk’ to explain risk to our clients. The Staircase is an imaginary one that has ten steps – from 1 to 10 – the top floor. Think of this as the higher you are on the staircase the more it hurts if you fall off!
The majority of our work involves handling client investments; our charges fall into two areas:
Initial (one off) charges
Researching client background, taxation and existing holdings.
Putting together a plan and agreeing it.
We typically charge between 1.0% and 1.5% of funds invested, depending on amounts and complexity.
For regular reviews and meetings as well as managing and rebalancing portfolios.
We charge 0.8% of funds advised on, per annum.
In addition investment houses will make charges for running their funds.
It is important that the level of fees should allow for the real prospect of obtaining returns that better deposit based alternative investments – taking into account risk tolerance and required return. If we do not feel that we can benefit you we will tell you and decline to act.
Please note that the first meeting is free and that we will not carry out any chargeable work without having first discussed and agreed the amounts with you.