How does the investment process actually work?
Here at SK, we understand that people may well come to us not really knowing what’s involved in investing money through us or how it all works. With this in mind, I thought I would shed some light on the day to day of how we set up your investments and manage your money.
What do we actually do?
When you invest with SK, the decisions we make are based on the financial planning advice and financial plan that we create closely with you. We talk to you about your financial situation, your needs and wants, we listen to you and take into consideration what you want to achieve now and in the future. We discuss the level of investment risk you want to take and your preferences as to whether you want your finances managed on a passive or blended basis (you can find out more about the differences here). This is what allows us to find the best investment opportunities to suit you.
Ultimately, we are responsible for providing the advice, for making the financial plan, for administering your financial arrangements and for the portfolios and all our actions are regulated directly by the Financial Conducts Authority (FCA). It’s a responsibility that we take very seriously, we want to get it right for you because we care about our clients and our relationships and we value and respect the trust you and our clients are placing in us – it’s why 100% of our new business comes from referrals.
Your money is fully protected
It’s also important to realise that we do not hold any client money. Any investments that are made with us are invested with a platform provider, held under our client agency in an account(s) in your name.
Your money is protected by strict regulatory requirements. When you invest in funds through us, they are held by a platform provider using a nominee structure. This allows the platform provider to administer your investments efficiently, while ensuring that you are clearly identified as their owner. This means, in the unlikely event of the platform provider becoming insolvent, any money owed will not be paid out with your funds. In fact, your money cannot be accessed by any creditors.
Our trusted platform providers
Of course, each platform provider that we recommend is covered by the Financial Services Compensation Scheme (FSCS) and regulated by the FCA. But we’re also very picky about the providers we use. As a result, we like dealing with platform providers that, like us, are independently owned. And because platform providers need huge sums of investments on an ongoing basis, the financial stability of a platform provider is also immensely important. We have detailed our preferred top three platform providers are detailed below.
For us the important thing is understanding what you want to achieve when investing with us, building a strong, long lasting relationship with you and making sure your investments give you the best the best chance of living the life you really want.
Abrdn is listed on the FTSE 100 and has assets of over £544bn, making it the largest listed UK fund manager. They have employees in more than 40 locations across the globe.
Aberdeen Standard’s strategy has changed substantially in recent years. It has deliberately positioned itself away from being seen as a provider of a product (the old life company raison d’être) to that of a provider, which can deliver and administer efficient propositions in the asset accumulation space for a range of distribution mechanisms, with an emphasis on capital efficient and cash generative products. And they do this while also maintaining the positive aspects of its heritage and reputation.
Founded in 1995, AJ Bell is an ambitious business that is committed to continuous and progressive development. With an ongoing commitment to provide a high quality and cost-effective service in a rapidly developing market. They remain one of the fastest growing businesses in the financial services sector. They are the largest privately owned provider of self-administered pensions and institutional stockbroker services in the UK, with assets under administration now exceeding £22 billion.
Fidelity is an independent company that was established over 50 years ago. They are still owned by the founding family, senior management, and staff. They remain privately owned by the Johnson family. Like SK they do not have to answer to shareholders and so can make long-term decisions on behalf of their customers. As at 31 December 2020, they were responsible for looking after £516.9 billion on behalf of over 2.5 million customers around the world. What’s more, Fidelity has a strong balance sheet and liquidity position with own funds in excess of Pillar 1 regulatory requirements.