INVESTMENT MANGEMENT

Naturally, clients look to us to deliver superior returns than they would expect to achieve themselves. Some clients have no experience in this area, while others have high levels of knowledge, but lack the time to manage their own portfolio, or value additional input into their wealth management. Either way, we enjoy the education process, and raising understanding of the principles of investing.

Allied to this, our ongoing ‘Partnership’ service provides quarterly reports on investment conditions and outlooks, as well as other topical or relevant financial planning issues.

Rather than creating an additional layer of charges for our clients, we make all investment decisions in-house, and do not outsource this to stockbrokers or other third parties unless a client has a preference to do so. Using the vast array of information available to us through our subscription to research systems, accrued historical data, attendance at seminars and direct access to investment managers, we design and monitor various portfolios (tailored to specific client risk levels and client objectives).

While in an ideal world we all covet ‘maximum reward with minimum risk’, in reality we know that risk and reward are related. Notwithstanding this, and regardless of risk profile, we strive to achieve the most consistent long-term return possible. Controlling fluctuations is as important as returns for many of our clients.

Our in-house investment committee of advisers and technical personnel meets quarterly to review our portfolios. The most important factor determining returns is the asset allocation – the split between equities (stocks and shares) and more stable investments such as gilts. Beyond that, we diversify the portfolio within each sector – eg UK and overseas equities, government bonds and corporate bonds. Finally, within each sector, we choose accordingly for the client – eg for someone in retirement, UK equity income funds with reliable dividend streams are preferable to smaller company growth funds.

In addition to the investment return, there are other areas where we can deliver positive outcomes for clients, such as the following:

• Using ISA allowances
• Structuring portfolios to make use of other tax allowances, such as the Income Tax personal allowance and the Capital Gains Tax annual exemption.
• Apportioning ownership of investments between spouses in the most tax-efficient way.
• Where appropriate, having regard for Inheritance Tax-efficient investments.
• Tax-efficient National Savings products.
• Our ongoing review service provides the opportunity for discussions such as profit-taking.

The continuing low interest rate climate has led to many people considering active investment for the first time. Some people have reservations about this, through personal experience or anecdote. We aim to provide a reassuring feel of behavioural coaching alongside the nuts and bolts of our investment expertise. £60 billion per year continues to be deposited in Cash ISAs. We welcome enquiries for those who feel they hold surplus cash and are keen for their assets to maintain or improve their real value.

Ethical Investing

We have clients who have specified that they do not want an unfettered investment strategy, as it is important to them to exclude certain sectors from their portfolio. For example, tobacco stocks are commonly among the top ten holdings in UK equity funds, while other clients may want screening of their portfolio on environmental grounds.

Ethical investing has developed hugely in the past 20 years, and there are now a vast array of funds to suit preferences, which form part of our due diligence and panel of preferred funds. It is also interesting to note that ethical investing no longer carries an inevitable penalty in terms of returns – it certainly can sometimes be the case that ethical funds out-perform unconstrained counterparts.