Our Investment approach
Advising you on how your money is invested is core to what we do. Whether your assets are in a pension plan or invested directly in personal accounts, how they are invested should be incorporated in your personal financial plan. Your plan and your investments are closely linked and can’t be separated within our advice. We’re happy to review existing investments and check their alignment with how we currently view investment opportunities.
It is important then that you understand our investment philosophy.
Asset allocation:Long term investment returns are driven by growth in the value of real assets; equities, bonds and property. This guides our advice but we remain flexible to incorporate alternative strategies aimed at addressing specific objectives and clients’ attitude to risk.
It may be taken for granted, but the more concentrated your investment in any asset class, the greater the risk that if things go wrong, you’re going to lose money. The more diversified your investments, the lower the risk that any one event will lose you money. We call this diversification and achieving this is an important objective for us.
If you are going to invest to make a return, you need to give it time. Time is an important component of an investment strategy. The compounding effect of making money on top of gains will see your investments grow more and more over the years. Time also gives your investments the space to recover from downturns and losses. Volatility will become less of a concern if you have plenty of time to take the rough times with the times of growth. When investing for the shorter term we aim to reduce risk and select assets accordingly.
The costs of managing your money always need to be taken into account. High management charges, hidden trading costs and inefficient strategies can flatten you return. So we examine these carefully and take them into account in our advice.
We don’t manage money directly. So being nonaligned to investment managers and product providers means that we can take unbiased views on how they invest your money. Our aim is to help you choose an investment strategy to suit your style and objectives. We believe that markets are efficient, particularly in the long term. So we generally favour low cost passive equity investing over active management, on grounds of efficiency and long term evidence based effectiveness. But both approaches can have their place in many portfolios. Short term speculative investments, particularly in highly concentrated forms are to be avoided.
Arachas 6-stage Financial Planning Process
We explore details of your income and outgoings, your assets and liabilities. We look at your investment experience from the past, your appetite and your capacity for making risk investments into the future. From this we determine how to manage your portfolio.
We agree with you which key areas of your financial plan you want to prioritise. We document these for you in a preliminary planning note.
We consider each objective and apply rigorous research to finding solutions for your top priorities. We set out how we can implement your plan over time.
Our advice takes account of various structures, investment choices and tax treatments. You benefit from our relationships with many financial institutions to ensure top quality service.
We agree how you want to proceed, taking care in implementing each solution, ensuring much of the time and hassle is taken away from you.
A review date will be set to keep you on track with you plan and keep you informed of developments with your portfolio.