Lyndhurst Wealth has been designed to allow clients to simplify their financial affairs, consolidating their assets in one place in appropriate tax wrappers, whilst maintaining fund and investment choice.
- A dedicated financial adviser
- Annual financial review meeting with your adviser
- Annual portfolio valuations
- Online portfolio reporting
- Bi-monthly company newsletter and product guides
- Market leading funds and discounted charges
With modern products you no longer need to go to different providers for different tax wrappers and investment solutions. Wraps and Platforms now have access to many of the tax wrappers and investments you require and you can view all of your portfolio in one place. More Control, Greater Access, Enhanced Reporting, Less paperwork are just some of the feature benefits of this service.
Our strategy of adopting an “Investment Solutions” approach is fundamental to the relationships we develop with you. Historically, many Advisers believed that they add value to a clients affairs by “second guessing” the stock market and by trying to identify the next top performing fund.
We believe that we add value by sound, objective financial planning and then implementing an appropriate investment solution designed to meet those objectives.
Our focus is therefore on ensuring we meet objectives, not on promising market outperformance. Interestingly, once we have identified the planning objectives, outperformance of the stock market is hardly ever required – all that is needed is a sensible investment approach to meet those objectives.
Our selected Investment Solutions combine the power of risk profiling, modern portfolio theory and the investment expertise of leading global investment teams.
We have adopted this approach for the following primary reasons:
- To ensure your investments are managed in the most efficient manner consistent with your risk profile and investment time horizon.
- To maintain stability and consistency with the asset mix of your investments – both when initially invested and in the future.
- To ensure continual and automatic rebalancing of the mix of assets in these investment portfolios to ensure their ongoing suitability in meeting your financial needs and objectives.
There are four key features that underpin our investment philosophy:
Asset Class allocation, not stock picking or market timing is the key component of investment success. Academic studies have clearly demonstrated that it is the asset class allocation in any portfolio that is responsible for the vast majority of returns and that stock picking, market timing and other factors contribute very little to the performance of a portfolio.
Hence strategic asset allocation i.e. getting the right mix of assets between fixed income, equities and alternative investments, is crucial and therefore this has been the starting point in our selection of core investment solutions. Indeed, two major reports to the Financial Conduct Authority, from industry professionals, have endorsed this aspect of investing.
*Source: Brinson, Hood and Beebower ‘Determinants of Portfolio Performance’, 1986, Financial Analysts Journal.
Combining different asset classes with low correlation to each other improves risk and reward.
No single asset class produces consistent returns. Neither we nor the investment industry has a crystal ball and nobody knows which asset class will perform well in the future. But, by diversifying across several asset classes, we can increase returns and lower the risk in a portfolio.
Traditionally equities have been the engine which drives capital growth and accepted wisdom was that if you invest over a 5 year time period you would get a decent return and outperform cash. However the returns from the FTSE 100 over the past 10 years have been approximately 3% per annum and show a worse return than government gilts. Also during the “dotcom“years, investors who invested solely in equities would have seen 40% of your capital value disappear.
Equally, there are many other asset classes such as property, commodities and hedge funds that have also beaten cash over market cycles but each asset class demonstrates different risk and volatility characteristics.
Many advisers choose client investments by looking at their past performance. The above table shows how different asset classes have performed over the past 14 years and illustrates just how dangerous this can be. It clearly reinforces our fundamental belief as to why most advisers are simply not offering value to their clients.
The beauty of a multiple asset portfolio is that your investments can be allocated across a range of asset classes which helps to reduce volatility and provides more steady, consistent returns.
Putting all of your money in one asset class has been proved to be a high risk strategy. Even if that asset class performs well for a prolonged period of time there is likely to be a period when it underperforms. Unfortunately, forecasting when that will be is impossible. Diversifying our client’s investments will reduce the level of risk that they are exposed to. By investing in a range of different assets, we can potentially offset the underperformance from one particular investment type with the outperformance of another.
Diversification doesn’t just apply to different types of asset classes, but also to their geographical location. Emerging countries such as China and India have rapidly growing economies which offer potentially exciting investment opportunities but also carry higher risks. Conversely by investing solely in, say, the UK, you will be missing out on some potential growth opportunities elsewhere.
It is essential that the portfolio remains in line with you long term risk and reward objectives.
There are risks involved in every type of investment, but over the medium to long term investors need to be fully compensated for the risk they take. Higher risk doesn’t necessarily mean higher return. The risks involved in investing come in many forms but what is essential is that we have access to the appropriate expertise to monitor markets, economic conditions and they have the ability to take appropriate action if required.
How much the value of an asset rises and falls (a more volatile asset will lose money more often and will lose larger amounts).
How much assets move with each other (assets which are highly correlated tend to rise and fall at the same time).
The ability to get in and out of an investment
How easy it is to look at what is being invested in
The skill of the manager
The impact currency exposure will have on an investment
In addition to all the risks above the effect of inflation is frequently ignored by investors
To successfully carry out the above tasks requires resource, research capabilities and a qualified investment team.
Our investment committee consists of experienced professionals who meet regularly to ensure that the investment solutions are doing what “it says on the tin”.