Each client will have unique circumstances and importantly so are your investment preferences and tolerances.
As your wealth management partner, we will take you through an investment preference and risk tolerance exercise that looks at the following:
- RISK TOLERANCE – we commence this process with a questionnaire that will explore your attitudes towards risk and reward. From here we will then analyse whether your answers are consistent, delve further into how much risk you can tolerate and finally how you handle loss in the portfolio.
- GAP ANALYSIS – just because you can tolerate risk in your portfolio doesn’t necessarily mean you have to. We look at your available capital and compare this to the return required to meet your income requirements and financial demands of your other objectives. By understanding the level of gap between the two, we can provide you with alternative investment options to ensure you meet your requirements with as little risk as possible. Alternatively we may provide you with options on how to bridge this gap either by taking on more risk (and understanding the consequences) or adjusting your goals accordingly.
- INVESTMENT PREFERENCES – each client will have their own views and preferences on investments, therefore it is important that we build a solution that takes these views into account. We will explore with you what your views are on various investment approaches. Some examples include:
- Discretionary or Collaborative – do you want us to have management discretion on your investments in accordance with a pre-determined mandate without you having to approve every trade or would you prefer to approve potential trades beforehand?
- Dynamic or Strategic Asset Allocation – do you want your asset allocation to move over time in accordance with our investment committee’s research or would you prefer your capital invested in a set manner which is rebalanced on a pre-determined schedule?
- Exchange Traded Fund or Individual Company approach – would you prefer to have our portfolio managers invest in a range of underlying broad market / sector specific exchange traded funds or do you prefer investment in a smaller amount of direct companies from Australia or overseas?