How do we choose your Provider, Product and funds to invest in?
The market is full of hundreds of investment products and platforms. What do we mean by platforms? Sometimes also defined as ‘wraps’, a platform is an online service that allows us to transact and easily manage a variety of different investment portfolios for you. In its most basic form, a platform aggregates data from several sources to provide a consolidated view of your total money sources, from ISAs (Individual Savings Accounts), Self invested or Personal Pensions, Onshore and Offshore investment bonds, as well as a wide range of collective investment schemes. The selected platform then allows us access to 40-50 external Company investment funds, accessing over 1500 of their funds across all asset classes. Initial fund selection can then subsequently be changed within our ongoing review service, according to changes in risk tolerances, personal circumstances and financial goals and targets.
The recommended provider for any given product type may change dependent on which period of the year you instruct us, due to the constant evolution of post RDR product and pricing changes. At each advice process, we will explain to you the shortlist of providers assessed, reasons for ones eliminated from the process, culminating with a firm recommendation of provider and product/s.
The timescale you are prepared to leave your money invested for is a crucial factor in the advice we will give. If you are simply looking to put some money away for an event occurring with a couple of years time, we will more than likely advise you on some High St/Internet savings accounts to park your money. However, if you are saving for younger children’s university funding or your retirement for example, the chances are you may agree to a 10 year + holding period, and the advice will be much different.
Your risk tolerances and capacity to loss when investing money are another huge factor in our advice. It is crucial that you understand how the markets have performed historically, both in good and bad periods, so that you can make informed decisions on investing your money. Of course, past performance is no guide to the future, and our early conversations will educate you as to the risks involved in investing. Part of our comprehensive fact find will involve you completing a 9 question risk profiler, aimed to understand your tolerances in greater detail. The questionnaire results will be fed into our back office risk profiling system, resulting in a profile score of between 1-5 for each client (1 being risk averse and not wanting any risk to capital, up to 5 being adventurous and accepting an element of risk to capital for longer term outperformance potential). This profiling system is not the be all and end all however, as we will also assess a number of other factors within your personal and financial circumstances as well as our own views on the markets, before making a formal recommendation. Part of our ethos is always asking why excess risk has to be taken unccessarily, if low to average growth rates combined with a series of affordable contributions may suffice for specific targets.