Investments: The Importance of Investment Process

We use the following steps to understand our client’s investment needs:

1.     Clarify the length of time the investment is to be held
2.     Understand your tax situation
3.     Assess Your attitude to risk
4.     Advise on your asset allocation based on risk
5.     Select the most suitable funds and investments
6.     Ongoing monitoring of your portfolio with you

Initial Fact Finding Meeting

As dually qualified Chartered Accountants and Independent Financial Advisors we are well placed to understand your financial situation and provide pro active financial solutions

An area that we are able to add significant value is by advising on the most suitable tax wrapper for you, e.g. pension, ISA, Bond, Unit Trust, Specialist Investment, Trusts, EIS, VCT etc. Tax exerts a huge performance drag on investments and avoiding this cost significantly enhances investment performance.

The Importance of Understanding Risk

We use a behavioral questionnaire approach to understanding how you feel about investment risk. Your willingness to accept investment risk (or not) will directly affect the asset allocation we recommend for your investments. Your asset allocation will be based on the four main asset classes: cash fixed interest, property, equities. These may be further broken down into sub categories, for example UK equities, US equities and so on.

Asset Allocation

It is widely accepted, backed up by significant evidence, that asset allocation - the mix of the different asset classes in your portfolio - is the main factor in determining your likely future investment returns. Each asset class has historically displayed over long periods a certain level of average return with a measurable degree of volatility or risk.

Economic theory shows that, for a given level of attitude to risk, it is possible to establish an efficient mixture of assets that gives an effective balance between future risk and returns.

We have partnered with Barrie & Hibbert, an organisation that is a global leaders in understanding and modeling financial market risk. The calculations they carry out are complex, but basically use assumptions (over an investment period of at least 5 years) on the likely level of return, and of volatility of each asset class, and assumptions about the extent to which the different assets classes behave differently over particular periods

The output is the mix of the assets that based on these assumptions, gives the maximum target level of return for your chosen level of risk

 Investment Selection

Given the mix of assets as a framework, we then select investment funds for you, which, together with any existing investments that you wish to retain, have the appropriate underlying split of assets. We use sophisticated fund analysis software provided by Financial Express to select funds that meet our specific requirements.