LHW Financial Planning Investment Philosophies
At LHW Financial Planning we provide a comprehensive financial advice service giving you the freedom to live the life you desire. The financial plan we help you build is then aligned to your life plan.
All clients are different, and their investment objectives will vary. It is essential we identify the nature and timing of each clients' objectives before developing an asset mix and fund selection strategy. Our job is to assist our clients in matching both.
How Do We Help Our Clients Best Manage Risk?
Assisting clients understand risk and being comfortable with it is vitally important. Obtaining returns means an element of risk must be taken, particularly in the low interest environment we live in. However, higher levels of risk do not necessarily lead to higher returns. Being comfortable and understanding risk is more important. An investment portfolio is more likely to be successful if the client understands the balance between risk and reward.
Active & Passive Management – What Might Be Best?
Passive and Active management styles can both have a place in most clients' investment portfolios. Passive management tracks an index like the FTSE and is low cost. The passive funds are commonly used in more mature markets like Global/Eurozone equities or North American equities. The more expensive active management tends to suit the more specialist areas. These include Emerging Markets/Smaller Markets and Smaller Companies.
Understanding The Value of Monitoring Asset Allocation
It is important to monitor a client’s asset allocation. Assets are likely to perform differently over time. It is natural that portfolio allocations will begin to drift over time unless they are rebalanced at regular intervals.
Investment / Portfolio Efficiency
Most well designed portfolios are relatively simple, straightforward and understandable. Complexity can cause doubt and doubt can bring fear. Complexity tends to add cost without any guarantee of superior investment returns. Good portfolio design adds efficiency and reduces cost and is much more likely to reward the client.
Sustainability - A Glance at The Future
Environmental, Social & Governance (ESG) – Get used to the title. These factors are certainly in the spotlight now and LHW are very much aware of it. As an obvious example, climate change poses a systemic risk and investors should factor in the potential financial impact of transitioning to a low-carbon economy and the physical impacts of different climate outcomes. Identifying Companies who can deliver here and make profit will be the challenge of the future. However, funds of this nature will become a trend in the future when more is known about the Companies involved.