Our core investment principles

As financial planners, we often get asked how we make sound investment decisions. There are of course lots of different factors, but for us there are six core principles that help us do the very best job we can for our clients to help them successfully manage their wealth.

1. Suitable asset allocation

Asset allocation is about setting out how your portfolio is divided up long term between equities, bonds, cash and other asset classes and the ongoing commitment to this mix.

And it’s the most important driver of long term performance, far more so than timing the market or even which specific stocks you choose.

2. Rebalancing

Equities outperform bonds over the long term. But they are also riskier. If you judged your portfolio on performance alone, you’d go 100% equities, but the high risk involved makes this approach a no go for most investors.

We rebalance your portfolio to avoid any drift towards equites for performance purposes and make sure your exposure to risk is maintained at the level you’re comfortable with.

3. Behavioural coaching

Very few investors succeed in staying calm in turbulent markets and many end up taking exactly the wrong course of action. Behavioural pitfalls such as trying to time the markets or chase performance are among the biggest derailers.

This is where the original plan that we create with you comes into its own. We will remind you of the plan and help you keep emotions in check when markets get tough.

4. Cost Clarity

Cost informs both our asset allocation strategy and fund selection criteria. We recognise the need to choose companies with sufficient financial strength and adequate levels of service. But cost is one of the few known criteria at the outset and it has a demonstrable impact on future investment returns.

We offer ten risk rated models, the passive models are capped at 0.13% and the blended models are capped at 0.55%. This means that clients can control the amount that they spend on investment management, even if they can’t control the outcomes.

5. Tax allowances

The allocation of assets between taxable and tax-advantaged accounts is another important tool we use to add value each year. What’s more, just like minimising costs, the benefits of investing tax-efficiently will compound over time.

6. Annual Reviews

Experience has taught us that as people’s circumstances change, so too does their attitude to risk. What’s more, the value of existing and newly recommended financial products can change over time, which could in turn impact your risk diversification.

That’s why we propose we meet with you at least once a year to review your financial plan to make sure it is still on track to meet your objectives.

You can read more about how these principles play out in reality here.