Investment Planning

As Financial Life Planning uses a ‘client centred approach’ we will get to know you and we will take time to identify your financial values and goals, your key relationships, your risk tolerance and your existing level of assets and liabilities etc. We ensure that this discussion is comprehensive so that the advice we provide to you is appropriate.

We recommend a combination of active and passively managed investment strategies within client portfolios in favour of an asset class approach to investment.

Active investment managers try to ‘beat the market‘ either by relying on their own skill or by picking professional external fund managers whom they believe will do so. Active managers also look to regulate returns in times of market volatility by taking ‘active steps’ to mitigate losses.

Passive investment managers try to ‘match the market‘ by aligning their portfolios to the portfolios of other passive fund managers. Passive managers let the market follow its own course and deploy a ‘hands off‘ approach which can lead to greater losses when markets fall and greater gains when markets rise than those achieved by active managers.

Having considered a wealth of evidence on this subject we know that active managers don’t consistently deliver a return in excess of that available from the market as a whole. In addition active managers charge higher fees but in times of severe market volatility they, as stated above, look to mitigate losses by proactively taking steps to restructure the portfolios they hold.

We find that our clients prefer this approach and after many discussions we have found that losses tend to bear more heavily on our clients than equivalent levels of gains and as a result they actively look to avoid these losses by having their exposure to extreme market movements managed for them.

Portfolio investing is a rational and robust model of investing based on science rather than speculation. The portfolios we recommend are designed to deliver the performance of capital markets by capturing long-term returns at a level of volatility that is acceptable to our clients.

We believe that this strategy delivers the most cost effective model to our clients.

At present the portfolios we recommend to clients are provided by our investment partners, Aviva, Davy Select, Irish Life, New Ireland, Quilter Cheviot, and Zurich Life, etc.

Portfolio Structure and Management

We have identified the following steps to successful investing:

  1. Evaluating your Attitude and Capacity to take risk.
    The optimal allocation to the different asset classes within a portfolio is governed by our clients individual risk profile and their long-term financial goals.
  2. Diversify to avoid market uncertainty.
    Investing in a diversified portfolio of different asset classes helps to reduce the expected volatility of future returns.
  3. Protect wealth from Inflation.
    The risk of inflation is particularly pertinent to our clients who are either approaching or have reached retirement and who require their wealth to sustain their desired standard of living.
  4. Manage costs as they erode wealth.
    A Euro saved in costs is no different from a Euro earned from market performance, yet it is far more valuable due to its consistency over time and the fact that it is achieved without taking any risk.
  5. Control emotions and stay invested – Investment Biases.
    The emotional impacts of regret, greed, and panic can result in trying to time markets and the excessive taking or avoidance of risk. This usually results in reduced investment returns over the long-term and by simply remaining invested this additional risk can be avoided.
  6. Rebalance portfolios to avoid excessive risk.
    Active mangers can be utilised to carry out this task for clients or if clients prefer we can offer to undertake regular reviews so that portfolios are rebalanced and maintained at the agreed asset allocation. Either way the objective will be to ensure that a portfolio continues to capture the expected level of returns clients require.

Portfolio administration

Most of our clients hold the majority of their investable assets on an administration platform provided by one or more of our investment partners. This allows our clients to monitor the value of all of their investments while also allowing Smart Finance to oversee their portfolios effectively and to deliver quick and efficient updates.

We’ll tell you more about our approach to investing and our investment partners when we meet.