Wealth Management

As you may have already experienced, one of the most difficult tasks any investor faces is deciding where to invest their money and which funds to invest in. There are thousands of funds offered by hundreds of investment companies so the task requires a fair amount of knowledge and skill to get it right.

Unfortunately, many investors have had poor investment experiences and often look to their advisers for the answer to improving performance. By their nature, advisers are skilled at working with the client to determine their objectives, but the majority are not investment managers. It’s then left up to the adviser to research and select the investment funds available in the marketplace.

The difficulty is that the adviser usually lacks the hands on investment experience and has to wade through the promotional offerings from the leading fund managers, all vying for the adviser’s attention.

What you may find is that the way in which you are currently managing your portfolio is fragmented. For example, you may have:

A personal pension (or AVC), invested in 3 funds
A Maxi ISA, invested in 4 funds
An endowment plan, invested in 3 funds

As we can see, with a basic portfolio of three ‘products’ it’s possible to have your money spread across 10 funds. Whilst this may be fine when you begin each plan, it becomes more and more difficult to manage; especially as your attitude to risk alters (our acceptance of risk is shown to reduce as we grow older). It’s also common to find that clients have their money invested without the correct asset allocation (see below) related to their risk profile.

Our experience is that some investors NEVER review the funds they are investing in. This could be for many reasons; lost contact with their adviser, lack of knowledge or not enough time.

So the key is getting your ‘asset allocation’ right and reducing the amount of time it takes to manage your portfolio. Once we understand your tolerance to investment risk (we’ll discuss this with you and ask you to complete a questionnaire) we can then begin the process of determining how we can structure a portfolio to ensure optimum returns within the parameters set by the risk profiling ‘comfort zone’.

Different asset types tend to rise and fall in value at different times and for an investment portfolio to be successful this diversification is by far the most important aspect of the investment process. Our portfolios consist of four basic asset classes:

Equities (Stocks and Shares)
Fixed Income Securities (Bonds)
Property
Cash

It is all too easy to accumulate a number of policies, pensions and life insurance policies over a period of time such that not only do you lose track of your affairs, but also ‘over-indulge’. With a busy lifestyle, it is hard to keep abreast of your financial affairs, trusting various ‘experts’ to set you up with suitable policies. Often the parties involved have a financial interest themselves in securing more than you need.

To be released from this quagmire of pension provision, life insurance and financial uncertainty, a cool and level head is called for. Somebody who takes a step-back and oversees your affairs in an objective manner, not allowing your affairs to become over complicated, and changing and advising as necessary at the right time.

The sophisticated technology used also looked into my financial position in the future, identifying exactly what issues needed attention and what did not. This enabled me to stop my pension plans as I had enough investment already here, but I was simply not aware of this.

Graeme Urwin, as a financial planner, has transformed my portfolio, reduced ‘waste’ and plugged holes where needed. I can see the future in terms of financial planning more clearly and have more confidence having now secured my financial future.

Dr Paul Sidhu, Consultant Radiologist, Kings College Hospital, London

Asset Allocation

Having established the correct allocation between equity and interest bearing securities for your portfolio, we then needed to apply modern techniques to ensure the greatest probability that you will earn the return that is appropriate for the level of risk that you are willing to assume. In doing so, we have placed our reliance in principles established by a collection of actual evidence and theory from the academic disciplines of economics and finance. This is a body of work referred to as Modern Portfolio Theory (MPT).

Administration

Once we’ve decided how your money will be invested we can move onto how it will be managed from an administration point of view.

Technology developments now mean that you are able to view all your investments from one platform, known as a wrap account. In effect what this means is that instead of receiving statements and contract notes from many different investment companies you will be able to deal with one provider (the wrap company) and view all your holdings in one place.

The wrap company that we have chosen (there are approximately 5 to choose from) is called Transact. Please understand that they only provide you with administration services. Your investments are held with the funds that have been selected in line with your personal risk profile (which helps build the correct asset allocation).

By investing your money into a risk-assessed portfolio and by using a wrap account to monitor this you’ll be able to:

Understand and control the amount of risk you are taking
Reduce your paperwork as future statements only come from Transact, the wrap provider
Save time every year as you won’t be constantly deciding which funds to invest in
Easily plan to reduce your portfolio risk as you approach retirement

What We Do

To start taking advantage of this service we’ll ask you to provide us with a list of your current investments, along with the plan/policy numbers. We’ll also ask you to sign a letter of authority for each plan to enable us to obtain all the necessary details from each company.

Once we’ve received these details we’ll:

Ask you to complete an online (paper version also available) questionnaire that will help us to evaluate your risk profile
Analyse how much you’re being charged by your plan manager(s)

We’ll then finalise the research by assessing the costs and set up of your existing portfolio versus the suggested new portfolio.

The next step is to discuss the research with you and to agree your investment strategy. You’ll then receive the relevant paperwork to complete (via the post or during a meeting).

At this stage we’ll send the forms to Transact. It is their responsibility to request all the monies from your existing providers. This process will normally take 4 – 8 weeks to complete (can be longer for pensions). During this you’ll receive paperwork from Transact and your existing provider.

Once complete you’ll be able to view your portfolio online. Transact will provide you with instructions.

How We Charge

Wealth Management Fee

In order to cover the costs of transferring existing assets to a wrap platform, we charge 1-3% of the value of the assets transferred. Such an amount will be deducted from the portfolio held within the wrap platform.

Ongoing Review Fee

Following establishment of the portfolio, we ask you to agree to payment for the services provided. Such charges will be levied based on the average value of the fund over the period (typically monthly or quarterly) and be paid as a direct charge against the assets held.

This fee will be the equivalent quarterly or monthly proportion of an annual fee of 1% per annum e.g. where Transact deducts the fee quarterly it will be at a rate of 0.25% of the average value of the fund over that quarterly period. Where your assets held on Transact exceed £250,000 the charge reduces.

To find out more about the Wealth Management Service please click here to go to the enquiry form. We’ll get in contact with you within 24 hours.