Our investment approach
We think it’s important that your financial adviser is able to clearly explain to you what his process is for selecting suitable investments for your portfolio. Surely, that’s just common sense?
Unfortunately, many financial advisers have a haphazard approach to making investment recommendations. Some follow star fund managers; others pick funds based purely on past performance and others follow the ‘fad of the day’ such as was seen in recent years with property funds.
For the purposes of absolute clarity, we want to clearly lay out the process we undertake to arrive at an investment recommendation:
- Once we’ve completed a fact find and have a full understanding of your objectives we’ll have a detailed discussion with you about your attitude to investment risk. Normally this involves the completion of a risk profile questionnaire. This will help guide us by providing the limits within which you are prepared to invest. During these discussions, some clients decide to increase their risk tolerance rating whilst others decide to reduce their risk rating. Whatever you decide, we’ll help you to make a decision that you’re comfortable with. That way we sleep at night too.
- Once we know your attitude to risk we can allocate your investment or pension monies into suitable areas.
- For clients with less than £60,000 to invest we favour low cost risk rated model portfolios with automatic re-balancing to ensure that your portfolio remains within your tolerance to risk.
- Larger investments (above £60,000) will be allocated to one or several of our risk rated model portfolios managed on a discretionary basis which comprise a spread of asset classes to include cash, fixed interest, equities, property and alternative investments. These portfolios are actively managed and strategic investment changes made as economic conditions dictate. If appropriate, each portfolio can quickly be moved into cash during difficult market conditions.
- Sovereign will undertake regular reviews of each model portfolio to ensure that they are performing within agreed parameters. We’ll also conduct regular meetings with the investment managers to ensure that we understand what is going on within each portfolio and we’ll keep you informed, either during face to face review meetings or via e-mail.
- We’ll hold regular review meetings with you in accordance with your chosen service proposition. During these meetings we’ll re-visit your attitude to risk and we’ll also ensure that your portfolio is re-balanced to ensure that it remains within a level of risk that is acceptable to you.
Click here to read about our Investment Philosophy
