08009993348 david@cadoganwilson.co.uk

Wealth management

A bespoke programme for you

To be successful, your investment strategy must be prepared in the context of your specific goals and objectives and should reflect your core values. Without this context the exercise would be meaningless. Our wealth management programme is a process designed to create an investment strategy that relates directly to you and your aims and objectives - in other words a bespoke strategy. Your Financial Plan will form the basis for this exercise.

Required rate of return

It will become clear from your Strategic Financial Plan the rate of return on capital that you need to obtain to fulfil your goals. This is important in relation to the establishment of the final asset allocation applied to your investments and must be realistic within the context of your attitude towards risk. Risk and return are correlated.

Attitude to risk

We will assess your attitude to risk using modern psychometric questionnaires and share the results with you . This will give us an insight into your attitudes and enable us to establish a preliminary asset allocation that you would be comfortable with.

Asset allocation

Asset allocation is the process of deciding how much of your portfolio to invest in each of the main asset classes i.e. equities, fixed interest, cash and property. Your portfolio's asset allocation, being the most important factor in the success of any portfolio, has to marry up your attitude to risk and your required rate of return. If there is a mismatch we will take the time to outline your options using sophisticated modelling and help you to decide the course you wish to adopt.

For instance if, in order to pay for private education for your children, you needed a return on capital earmarked for the purpose of 10 % per annum but your tolerance of risk indicated an asset allocation that was likely to generate 7% per annum then there would have to be a trade off. Either you could increase the capital available, or accept a greater risk to the capital, or look for a school with lower fees or, as a very last resort, abandon the idea of private education altogether. The point is that whatever decision you took, it would be an informed one based on your individual situation.

Taxation

Your portfolio will be allocated to those products which help, through their unique tax privileges, to maximise the after tax or net return on capital. This too will be related to you and your specific aims and objectives.

For instance if one of your objectives was to build up capital over a period of time in order to purchase a major item at a specified time in the future then Individual Savings Accounts may form part of our recommendation. On the other hand if your primary objective was to pass on as much of your wealth to your beneficiaries free of Inheritance tax we would point out that ISAs are firmly locked in your estate and the capital within them will, provided thresholds are exceeded, be subject to 40% tax on death.

Active v passive investment approaches

Before launching our wealth management service we conducted a lengthy and in-depth study into the relative merits of active fund management as compared with the passive investment approach associated with index investing. Our conclusions, supported by a wealth of academic research and empirical studies, led us to adopt a passive approach to investment. You can read a detailed explanation of the rationale behind our investment approach by clicking here.

Our approach is based on asset class investing. Asset class funds deliver the investment returns of an entire asset class such as a group of shares or fixed interest securities with similar risk and expected return characteristics. Our aim is to give you the benefit of market returns whilst keeping costs as low as possible and risk to a level appropriate to your required returns.

Risk graded portfolios

We have created nine risk-graded portfolios with varying exposure to the different asset classes using a variety of institutional index funds and Exchange Traded Funds.Your risk tolerance and your required rate of return will indicate which portfolio is most suitable for you.

Staying on course

As your personal wealth manager we will encourage you over time to stay focused, to eschew emotion, and to maintain the discipline and patience necessary to allow your portfolio to achieve the objectives that together we have set for it.

We will also carry out regular, structured reviews of your portfolio. This will include any rebalancing needed to ensure that the agreed asset allocation criteria are maintained.