How we work
Our Investment Process
This document explains the defined investment strategy that we use with our clients. Our investment proposition involves assessing your tolerance to investment risk, regularly monitoring your fund selection and rebalancing.
The process is designed to ensure that your portfolio continues to be managed in line with your agreed objectives and tolerance to risk.
Dynamic Planner Risk Questionnaire
We use a short risk questionnaire to gather information used to assess your tolerance to risk and capacity for financial loss. The questions were designed to measure risk attitude and risk personality. They are based upon the social science of psychometrics and have been created by Distribution Technology (in association with Oxford Risk, an industry leading psychometric profiling company).
The Risk Analysis Tool
We use a risk analysis tool which is devised by Distribution Technology and provided by Co-Funds to analyse your responses to the questions on the risk questionnaire. This provides an indication of your potential tolerance to investment risk using a scale of 1 to 10, where 1 represents a low tolerance to risk and 10 represents a high tolerance to risk. You will be provided with a description of the risk category which has been determined after completing the questionnaire.
We will discuss with you the risk category which has been calculated by the tool and what this may mean for your investment portfolio. We will assess your knowledge and experience of investments and discuss with you potential alternative risk categories and risk descriptions in coming to a conclusion as to the most appropriate level of risk tolerance for you.
We will then use the selected risk category to choose an appropriate portfolio designed to keep within your agreed tolerance for investment risk. If your attitude to risk is category 1 or 2 or your capacity for financial loss is very low we may recommend, after thorough discussion with you, cash deposits.
The descriptions of 10 risk categories used to assess your tolerance for risk are shown within the appendix to this document.
Our Portfolio Offerings – Using outsourced Fund Selection
We select your investments from three main outsourced Fund of Fund or Portfolio offerings. Our recommended solution will be chosen to fit your overall investment circumstances and
Objectives: In the event that none of our portfolio offerings fit with your overall investment circumstances and objectives then we can discuss your individual requirements with you and we may recommend an alternative bespoke solution.
We will bring together the talents of three specialist Fund of Fund managers to provide you with access to a fully diversified investment portfolio which is specifically designed to reflect your attitude to investment risk. Your investment is split evenly across the risk-rated portfolios provided by Standard Life My Folio, 7IM and F&C MM Navigator.
This means that you benefit from diversification across asset classes, different fund management techniques and investment strategies which aim to reduce volatility and improve the potential for consistent investment performance.
The managers of the three risk-rated funds will regularly rebalance their underlying portfolios to ensure that your investment continues to keep in line with your agreed tolerance to investment risk.
The following portfolios are available:
|3. Low||4. Lowest Medium|
|5. Low Medium||6. High Medium|
|7. Highest Medium|
These portfolios are aligned to risk categories 3 to 7.
The Investment Portfolios are available for investments of £3,000 and above. However, this will be suitable for those clients with portfolios of £15,000 and above.
We offer an on-going service where we review your account every year, (6 or 3 monthly at an additional cost) and inform you of new recommendations or changes that may be relevant to your circumstances. This service is provided at a charge of 0.5% per month and can be either deducted from your investment or paid by direct debit. This service can be cancelled at any time. Please ask your adviser for more details.”
These are model portfolios that bring together the talents of three specialist portfolio managers to provide you with access to a fully diversified investment portfolio which is
Specifically designed to reflect your attitude to investment risk. Your investment is split evenly across the risk-rated portfolios provided by Standard Life My Folio, 7IM and Thames River (Part of the F&C Group).
We will be using the O&M Investment Profiler tool, a leading fund research company. All of the selected funds within your portfolio will have been selected to fit within a strategic asset allocation (a mix of different investment types and assets) which is consistent with your attitude to investment risk. The strategic asset allocation is supplied by Distribution Technology and is designed to be aligned to your chosen risk category which has been determined through the risk analysis process.
Your portfolio will be regularly reviewed every 6 months. Following the review we may recommend changes to your fund selection to ensure that your portfolio always has the best perceived blend of funds to meet its stated investment objective. We will notify you, in writing, of any recommended fund changes and you will be given the opportunity to discuss any investment changes with us.
Each year we will rebalance your portfolio to its starting asset allocation to ensure that your investment continues to keep in line with your agreed tolerance to investment risk.
We offer from a choice of eight growth portfolios which are aligned to risk categories 3 to 10. These include options for the more aggressive investor.
We also offer five portfolios which are suitable for investors requiring income. The income portfolios are aligned to risk categories 3 to 7.
We will recommend Model Portfolios for investments of £100,000 and above. We use these portfolios for clients who prefer to have the more regular quarterly review with the option to discuss their fund selections with us.
You will be offered an annual review meeting to examine your overall investment objectives and any potential changes to your tolerance for investment risk.
Discretionary Fund Management
For larger portfolios, usually in excess of £250,000, we maintain relationships with two specialist discretionary portfolio management companies. If this route is selected we will discuss your requirements and facilitate an introduction to a private investment manager who will be appointed to manage a bespoke portfolio in accordance with your needs. Your appointed portfolio manager will discuss your investment objectives with you.
Administration of your Investment Solution
The Fund of Funds, Investment Portfolios and the Herts & Essex Financial Services Model Portfolios are administered using an investment platform and wrap account respectively. An investment platform/wrap is an online platform utility which assists advisers with arranging and reporting on fund and portfolio investments across a range of investment types and tax wrappers.
We administer the Investment Portfolio on the Cofunds Platform.
The Model Portfolios can be delivered to you using either, Standard Life Wrap Platform, Co-Funds, AJ Bell SIPP Center or the Fidelity Funds Network Platform. We will discuss your investment requirements with you to determine our recommended choice of platform.
We will provide you with full details of your platform/wrap account as part of our recommendation.
Investment Wrappers Available
Our Investment Proposition can be used with the following range of investment wrappers:
- Open Ended Investment Companies/Unit Trust Portfolios
- Individual Savings Accounts (ISAs)
- Self-Invested Personal Pensions (SIPPs)
- Onshore Investment Bonds (including a range of trust investments).
- Offshore Investment Bonds
- Investment Trusts
Portfolios held within ISAs and SIPPs are considered tax efficient and, subject to keeping within the investment limits and rules for these wrappers, there will not usually be any tax liability arising on investment gains on the portfolio. Any dividend distributions on the underlying investment will, however, be paid net of a 10% income tax credit which cannot be reclaimed.
Investment gains made on the Unit Trust Portfolios could be subject to Capital Gains Tax (CGT) which can be offset against the annual CGT allowance. Many people do not make regular use of their annual tax-free CGT allowance meaning that a tax saving opportunity is then wasted.
One advantage of holding the Herts & Essex Financial Services Model Portfolio as Unit Trust Account on a Wrap is that any investment gains can be realised and offset against the
annual CGT allowance during the process of making suggested fund changes or regular rebalancing.
We will explain to you the taxation position of your portfolio as part of our recommendation. Please inform us of any change to your financial circumstances as this may impact on the future taxation position of your portfolio.
To discuss any aspect of our investment proposition and whether it is suitable to meet your investment requirements please contact Veryl Joe MIFS DipFA.
Please do not hesitate to let me know if there are any questions you would like to ask. We take great pride in the level of service that we offer Clients, regardless of the method by which they choose for us to be remunerated.