All financial advisors must carry out an investment risk profile analysis, prior to recommending any suitable investment strategy for their clients. This risk and reward profiling is to help place clients within their appropriate investment volatility level (risk rating), taking, product type, time horizon and risk affordability into account.
These volatility levels are kown as ESMA risk ratings and play an important role in advising clients, but this is just the first layer to robust investment risk management. Managing long-term volatitity within set target ranges is hugely important, as is an understanding the dangers of behavioural bias and herd mentality.
We utilise Longboat Analytics tool Fund Focus to provide us with daily market data analytics to help enable better investment recommendations, using the real-time fund data to compare individual fund performance against their market peers.
In making our recommedations will also display and explain our use of total expense ratios (TER) aa well as Sharpe ratios relevent to your portfolio, to provide genuine costs transparency, as well as appropriate risk and reward.
Our risk management philosophy then incorporates the following:
Efficient tax planning, and the appropriate use of passive indexed funds together with competitively costed active fund holdings, will help you avoid unnecessary charges, whilst remaining cognisant of risk and reward.
Cheaper passive holdings alone cannot react to market volatility like active and as market dips are inevitable, sufficient time to recover is essential. We construct client portfolios on a bespoke basis that include regular monitoring.
Market conditions will change. We ignore the noise and help you understand the danger of behavioural bias and impulsive decision-making over the lifetime of your investment.
Our bespoke investment solutions involve the construction of diversified portfolios spanning several asset classes and investment managers and include the full implementation and monitoring of a long-term critical plan. We combine strategic asset allocation advice tailored to specific investors’ needs and objectives, with a robust multi-manager structure.
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