Our Approach To Investing - Step by Step
Step 1 - Initial Consultation Meeting
The starting point is to understand fully your current personal and financial situation circumstances. We will take into account your values, objectives and goals, your relationships with your family, your work or business and your existing advisers. We also look at your tax position and your investments so that we can appraise how closely they are aligned to your financial planning objectives. We will ask you to complete a Risk Profile Questionnaire to give us an indication of the level of investment risk that is acceptable to you.
Step 2 - Information Gathering and Identifying Objectives
Subject to your written consent, we will then gather all of your financial information from a combination of the information you can provide and by writing directly to the investment providers where appropriate. We then set out in writing to you a summary of what we believe your goals, objectives and priorities are, as well as clarifying your attitude to risk. This is will be critical to investment portfolio construction. Your understanding of investment risk is paramount to us, as we know we are dealing with your financial future and it is essential that we help you to make an informed decision.
Step 3 - Asset Allocation
It is now generally accepted that strategic asset allocation is by far the most important determinant of portfolio performance. This is the process of allocating your capital across a range of different asset classes, such as cash, fixed interest, property and equities. This is not simply a question of diversification, although spreading risk amongst different asset classes is clearly important. The optimum split between these asset classes depends on your personal objectives for the portfolio and on the level of risk that you are prepared to take over your chosen timescale. We use various techniques to show you the risk and reward relationship between different asset allocations and risk profiles, as well as highlighting the likely outcomes for your natural risk tolerance. We then compare these to the risk profile of your existing portfolio before a final asset allocation is chosen. Please see an example of our Risk Profile Questionnaire in the Client Information Pack.
Step 4 - Implementation and Investments
Once the asset allocation is agreed, a proposal for the construction of your asset allocation model will be made to ensure that as far as possible the appropriate asset are held in the most efficient tax wrapper. Having thoroughly researched the market for competitive quotes, we then write to you recommending specific investments and tax wrappers, as well as an explanation of their relevance and suitability.
Step 5 - Review and Rebalance
The final step is ongoing; namely, to review the portfolio on a regular basis and make alterations where required. Reviews should take place at least annually, but can be more frequent if required. The review process allows us to remind you of the decisions you have made, answer any queries or concerns you may have, rebalance the portfolio within agreed parameters and deal with any changes to your circumstances.
Note: If you wish to be contacted in regards to this service please complete the enquiry form. If you are an existing client and haven't already done so, you may wish to register for our newsletter by e-mail
Lyndhurst Financial Management Limited is Authorised and Regulated by the Financial Services Authority (www.fsa.gov.uk/register). FSA Registration No: 154621
