An important factor in investment performance is asset allocation. A good well balanced portfolio will have a mixture of cash deposits, fixed interest securities, stock market funds and perhaps property. The reasoning is that different asset classes perform well at different times according to different economic conditions. Hence, diversification reduces the overall risk in terms of the anticipated returns.
Risk Profiling
Our clients’ funds have different risk profiles based upon a scale of 1 to 6 with 1 being the lowest risk. An important early stage of our investment process is to understand your own personal attitude to risk. This will enable us to identify the right balance between risk and reward that you will be comfortable with. We’re all different and indeed we can often adopt different risk profiles to our different objectives.
Fixed interest securities such as gilts have a lower overall risk profile than stock market funds and so a client with a personal risk profile of ‘2’ for example will have a greater proportion of fixed interest funds in their portfolio than a client with a risk profile of ‘5’ for example.
Tax Wrapper
Our advisers will identify the most appropriate combination of tax wrappers for your investments based upon your current objectives and anticipated plans. Such as ISAs, Unit Trusts, Investment Trusts, OEICs, Insurance Bonds, or Pension funds etc. We’ll consider government initiatives such Enterprise Investment Schemes and Venture Capital Trusts; however we won’t involve our clients in tax avoidance schemes.
Ongoing Service Levels
If you have money invested it is vital to monitor its performance. You wouldn’t leave your cash unattended so why leave the performance of your investments unchecked? We have different service levels dependent upon the needs of our clients and the size of their portfolios. At the very least we recommend an annual review to check that your risk profile is still matched to the risk profile of your funds.
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The value of investments and the income they produce can fall as well as rise. You may get back less than you invested.
Tax treatment varies according to individual circumstances and is subject to change.
Venture Capital Trusts (VCT) and Enterprise Investment Schemes (EIS) invest in assets that are high risk and can be difficult to sell such as shares in unlisted companies. The value of the investment and the income from it can fall as well as rise and investors may not get back what they originally invested, even taking into account the tax benefits. These are for existing clients or experienced investors.
For ISA's Investors do not pay any personal tax on income or gains, but ISAs may pay unrecoverable tax on income from stocks and shares received by the ISA managers.
Stocks and Shares ISAs invest in Corporate bonds; stocks and shares and other assets that fluctuate in value.
You should only consider these products if you are willing to take some risk with your capital. We will consider whether such products are suitable for you before recommending an investment.
“Good performance levels and fair charges combined with correct asset allocation are the key ingredients”
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