The key steps to successful investing

Apr 15, 2016 | Tony Byrne's View

Most people already have an investment portfolio, which by definition, is a collection of assets that intends to make a profit. However, many people struggle to answer a simple question. Is their existing investment portfolio right for them?

Getting to know you
client engagement

Before advising you, we get to know you. This involves asking questions to help us understand your aims and circumstances. From there, we will assess the financial resources you have set aside to achieve your goals. We will also ask you to complete a short questionnaire. Your answers will help us assess your willingness to take risk and capacity to accept it. We will then discuss the questionnaire with you to ensure you understand the possible investment returns you might expect.

Prioritising your goals
strategy and planning

We will help you prioritise your goals within an investment timeline featuring these durations:

  • Short Term – 6 to 24 months.
  • Medium Term – 2 to 5 years.
  • Long Term – 5 to 10 years and beyond.

With your investment timeline in place, we will help arrange your finances. We aim to optimise your ability to achieve your goals with the lowest level of risk to your portfolio and future standard of living.

Investing your money

Once your financial plan is in place, we will account for your attitude to risk and recommend the most suitable mix of assets to achieve your goals. This will usually involve a mixture of Cash, Bonds, Property and Equities. Before recommending an overall approach that you are comfortable with, we will explain the merits of strategic and tactical asset allocation and active and passive strategies.

After agreeing the strategy, we will review your current investments, to ensure they are still suitable within your new risk-rated portfolio. We will then build a tailored investment portfolio for you and provide a clear picture of its expected performance over time. Naturally, we cannot guarantee these numbers.

Optimising your tax position

To optimise your returns, we will ensure your new portfolio takes advantage of all available tax allowances while making sure they do not compromise your financial plan. Where appropriate, we will access Individual Savings Accounts (ISAs), pensions, onshore and offshore bond tax structures, and a general investment account to optimise your annual capital gains tax allowances. We may also recommend trusts to manage inheritance tax liabilities and help distribute your wealth.

Keeping your portfolio current
on-going service

Your portfolio is only current at the date we create it. World markets move by the second, economic climates change and fund managers come and go. This means your investment portfolio can quickly deviate from your expected level of risk – and be less able to achieve your goals. That’s why our wealth management service’s review process is so vital.

– Review your asset allocation
To ensure your portfolio matches your agreed level of risk and is on target to achieve the expected returns for reaching each goal, we regularly and automatically rebalance your asset allocation. So you can rest assured your portfolio is never exposed to excessive risk that will increase the potential for short-term losses. Equally, you can relax knowing your portfolio will not be overly cautious, reducing your potential for growth and jeopardising its aim of achieving your goals.

– Review your investments
As economic climates, markets and fund management groups change, you must make sure your investments remain appropriate for your portfolio. Every month, we will review your investment portfolio. Where necessary, we will adjust the portfolio to ensure your investments provide optimum returns and remain financially stable.

– Review your goals
Every year, we will offer you the opportunity to meet and review the performance of your portfolio and discuss any changes in your life over the past 12 months. We will ensure your goals remain current and, if necessary, adjust your investment timeline. We will also review your attitude and capacity for risk. Where appropriate, we will adjust your portfolio and range of tax wrappers. This will ensure your portfolio remains optimised towards achieving your financial goals and objectives.

Stock market linked investments and any income from them, can fall as well as rise and is not guaranteed. Any figures quoted are for illustrative purposes and should not be taken as a forecast or guarantee. Past performance should not be seen as an indication of future returns and clients may get back less than they have invested.

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