Whatever your level of experience, we could help you make better-informed investment decisions and help create and maintain the right investment strategy.
When it comes to planning for you and your family's financial future, how you choose to invest will depend entirely on your personal circumstances and what you want to achieve.
Life’s full of surprises. That’s why it’s good to set aside some money for emergencies before you start investing. Yet if you’ve too much sitting in your savings account, you could be missing out on the chance to earn more. Of course, all investments carry risk – but not all risk is equal. By accepting a carefully considered amount of risk, you can provide your money with better potential for growth.
However much you invest, we could make your hard-earned money work harder. From first timer to experienced investor, wherever you are in your investment journey we could help you take that next step.
Bear in mind, the value of investments and any income they generate can go down as well as up, meaning you may not get back what you invest. You can access your money if you need to, however you should aim to invest for at least 5 years.
Your Heritage adviser will work with you to create an investment plan that balances your key objectives with your attitude to risk, accounting for your current and potential tax position. We will also develop the best investment management plan for you, to help ensure that your money is working as hard as possible to help you achieve your goals.
Our advisers are completely independent and can help you access the whole investment market, advising on the most appropriate choice for you and your family.
Portfolio management is the art and science of selecting and overseeing a group of investments that meet the long-term financial objectives and risk tolerance of a client or a company.
When choosing investments, you cannot know how well they will perform. The return you get will depend on a variety of factors, such as the impact of charges, the particular shares or other investments selected, how stock markets in general move, and the asset allocation you choose.
An asset class is a broad group of securities or investments that have similar financial characteristics.
Traditionally, there are four main asset classes:
Mixing different asset classes is knows as Diversification.
The key to diversifying – and successful investing in general – is to spread your money across different kinds of investments, called asset classes.
The main asset classes are set out below.
Examples: Savings and current account balances, savings bonds, premium bonds and other NS&I products, Cash ISAs and any cash you have at home.
Risk Profile: Low – but your money’s buying power is eroded over time if inflation is higher than the interest rates paid. Cash you put into authorised UK banks or building societies is protected by the Financial Services Compensation Scheme up to £85,000.
Essentially a loan to a company or government for a fixed period.
Examples: Gilts (Government bonds), overseas bonds, local authority bonds and corporate bonds (loans to companies).
Risk Profile: Relatively low and returns predictable if held to maturity, however traded prices can be volatile. Your money’s buying power can still be eroded over time if inflation is higher than the interest rate paid on the bond.
Examples: You can hold shares directly or through an investment fund where you pool your money with other people’s, like with a unit trust, OEIC (open-ended investment company) or life fund.
Risk Profile: Investing in a single company is high risk. Investing in a fund provides more diversification, but risk levels will depend on the type of shares in the fund.
Examples: Includes residential or commercial property and buy-to-lets, and investments in property companies or funds.
Risk Profile: Price can vary and be more volatile than with bonds. Potential for gains but also losses. You might not be able to access your capital quickly if you have invested into property directly. Access to capital might also be restricted through property funds if closed to redemptions, meaning you will not have access until the redemption restriction has been lifted.
You financial adviser will need to access your attitude to risk and will do this by asking you to complete a questionnaire to determine your natural risk level on a scale of 1 -10, where 1 is the lowest risk level and 10 is the highest.
They will also discuss your capacity for loss which will explore how much capital you can afford to lose, that will not materially affect your standard of living, while still meeting your financial goals.
Once the adviser understands your investment amount, required term, natural risk level and capacity for loss, they will work with you to identify an agreed risk level, also on the scale of 1 to 10, where 1 is the lowest risk and 10 is the highest. This may be different from your natural risk level and may also be different from other investments, for example retirement savings compared with investing a windfall.
Defaqto has created 10 risk profiles which align to the attitude to risk levels. The higher the risk profile, the greater potential return but also increased potential falls in value.
Disclaimer : The value of investments may fall as well as rise. You may get back less than you originally invested.
For more information regarding our risk profiles, please feel free to get in touch to discuss this further.