FAQs

Investments

What is the difference between ‘savings’ and ‘investments’?

Whilst savings and investments both refer to ‘capital’ that you have accumulated, when we refer to savings we are generally referring to ‘cash based’ deposit accounts. Normally these would be held with Bank and Building Societies in savings accounts and could be ‘instant access’, ‘notice accounts’ ‘Fixed Rate Bonds’ or ‘Cash ISAs’.

‘Investments’ generally refer to capital that is working for you over the medium to longer term and will usually incorporate an element of risk (volatility). ‘Investments’ would normally be expected to produce a higher return than ‘savings’ over the longer term.

How much of my money should I be investing?

The amount of capital that you should invest will depend on your individual circumstances and what objectives you are trying to achieve. We would always recommend that you have at least four months income and a minimum of £5,000 held in savings accounts ‘in case of need’ before you consider investing any capital.

What is the minimum/maximum term over which I should invest?

This very much depends on what your investment objectives are and also your attitude to risk. We will ascertain this at our first meeting. Whilst you will generally be able to access the value of your investments ‘as and when’ required, ‘medium to higher risk’ investments will include some equity (share) exposure and therefore some capital fluctuation would be expected. Whilst this should level out over the longer term we would generally not invest capital unless you were prepared to leave it to work for you over the medium term of say at least 5 years. Most investments have open-ended terms so the money can usually remain invested until it is required. Of course we could consider shorter time scales for lower risk investments, bespoke to your specific requirements and objectives.

How often should my investments be reviewed?

Whilst you can leave your capital invested as long as required we recommend that your portfolio is reviewed at least annually. This is available as part of our ‘Silver Service’. For larger sums more regular reviews may be appropriate. If you take advantage of our ‘Choice IPS Model Portfolio Service’ we will review and rebalance your investment portfolio on a quarterly basis.

How do I get the best return without risking my capital?

Before you invest your money we will have a detailed discussion with you about your investment objectives and your ‘attitude to risk’. We will also make sure that you have sufficient short-term capital in your savings accounts to ensure that the money you invest can remain invested until your objective has been achieved. Once the amount to invest and risk profile has been agreed we will construct a suitable portfolio that is diversified across the key asset classes of ‘cash’, ‘equities’, ‘property’ and ‘bonds’. How much we invest in each asset class will depend on your risk profile, investment time scales and objectives.

What is meant be ‘investment volatility’?

‘volatility’ refers to the level of fluctuation you can see in the value of your investment over a given period of time. Generally speaking the higher the level of risk, the greater the level of fluctuation you could experience in the value of your investments. It is also true that over the longer term, investments with higher level of volatility are generally able to generate greater levels of returns.

How much will it cost to invest?

Our first meeting is always provided ‘free of charge’ and this is where we will assess your needs and discuss your investment objectives. When we meet we will tell you more about how our different levels of service are structured and agree the most suitable investment strategy for you. We offer four levels of service – ‘Bronze’, ‘Silver’, ‘Gold’ and ‘Platinum’ and they offer different levels of ‘advice time’ and are priced accordingly. We can usually provide discounts on the fund management costs of your investment that help offset the annual costs of our services. Our annual costs range from 0.50% to 1.00% depending on the amount you wish to invest and the level of service you require.

What is an investment platform?

‘Investment Platforms’ are administrative tools that enable us to manage your investments in a very cost effective way. They allow us to reduce the running costs of your investments and to deliver an efficient and scalable means of running your investment portfolio. This is done be centralising the administration of your investments and leaving your individual investment fund providers to just concentrate on the most important job – making your money grow. In the main we use the Standard Life WRAP and Fidelity Funds Network to manage client’s platform investments. These provide investor access to the Choice Investment Portfolio Solution service (Choice IPS) and our range of Wealth of Choice IPS Model Portfolios.

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