Assess Where You Are Today

First, map out what you need for financial security. How much do you pay a month for:
  • Your home (mortgage or rent)
  • Your utility bills
  • Food
  • Transportation
  • Insurance

For most of us these five categories make up about 65% of our expenses. Take how much you pay per month, add them up and multiply by 12 – now you have what you’ll need as annual income to achieve financial security. Think of this as step #1 of your personal financial planning journey.


You pay for your bills, but are you making sure that you’re establishing your future with a percentage of your income? 
Commit to paying yourself first, before anything else. 
By saving a small percentage of your income, you’ll start to create the nest egg that will see you thriving for years to come.


Only you know the life you want to lead. People value different things and these may change throughout your life. So, your investment choices are as individual as you are. We understand that wherever you are in life, your financial position and how you feel about risk is crucial to making a sound investment decision. 
Even the most financially astute people need some professional guidance. By getting to really know you, we can help you:
take advantage of tax-efficient investments such as ISAs;
select a diverse range of products that meet your risk comfort zone;
match products that respect your ethical and environmental beliefs;
understand your options and support you on your investment journey.
Fund choices made easier
Funds are a bit like a pick and mix sweetie bag, there's something for everyone. When looking around, you'll notice that funds are often listed according to:

  • the country or continent they invest in;
  • the class of investments they make;
  • how they are managed.
  • The abundance of choice may appear overwhelming, especially if you're trusting someone you've never encountered with your hard earned savings.

But by breaking the different types of funds down, it becomes easier. Funds can be generally categorised as:

Managed Funds

The investment companies, on behalf of a number of investors, manage these funds. Managed funds invest in a combination of assets from different regions. There are limits on how much of the fund can be made up with shares. There are three types of managed fund - cautious, balanced, and active. Cautious managed funds will invest about half your money in shares and the rest in fixed interest investments to minimise risk. Active managed portfolios, in comparison, can have up to 100% invested in equities, providing they have at least 10% invested in non-UK stocks and shares.

Asset Based

Asset based funds focus on a particular type of asset, such as technology, financial services or healthcare. Specific geographical regions, such as UK Corporate Bond Fund, or Global Property Fund, may provide further focus.

Geographically Based

Geography based funds invest mainly in investments from a specific country or region. These can be named areas such as Northern America, Japan and The UK. There are also relative regions such as Emerging Europe, which would include countries such as Turkey or the former Baltic States. Some geographically based funds carry a high risk. It's vital to seek advice about these prior to investing.

Tracker Funds

Tracker Funds are designed to match the performance, good or bad, of a particular index such as the FTSE 100, or FTSE Europe. Because investments are based on the index and not individual choices made by a fund manager, trackers are cheaper to run than managed funds, therefore charges are less.

Ethical Funds

Designed for investors that want to have a clear conscience. Ethical funds invest in companies because of their moral, or ethical stance towards factors such as animal testing and the environment.
There are generally three types: 
funds that exclude companies that have a negative impact such as tobacco or oil companies;
funds that only include companies with a positive impact, such as alternative energy companies; and
funds that invest in companies with a view to influencing their stance by becoming a major shareholder.
In these three groups the funds may specify other limits, such as investing in Corporate Bonds or Shares in companies on a particular index.
What else should you know?

Income or Growth

Most funds, unless they are specifically designed for income or growth, offer the option of paying out income to you, or reinvesting it back into the fund for growth.

Collective Funds

It is usual to invest in more than one fund to achieve a good spread of different investments. This helps to reduce risk because you are invested in more than one area. So you might choose a UK Corporate Bond Fund a UK Equity Fund, and a Global Equity Fund to counteract fluctuations in one area.

Taking the next step:

It is important to also look at each fund in isolation and the breakdown of investments, before making comparisons.
To simplify the process for investors there are a number of other facilities available, including:

Fund Supermarkets

A fund supermarket is precisely what it sounds like: a single shop where you can cherry pick a number of different funds.
The fund supermarket administers your investment and provides you with a single statement, but you are still invested in the individual funds.
It is also usual for fund supermarkets to offer discounts, so they can be cheaper as well as more practical than going to each investment fund manager separately.
They are particularly attractive for confident investors, who may have time to do their homework and know what they are looking at. The downside, is you get no advice. Although many provide guides, investment analysis and the latest market news, fund supermarkets effectively offer a no-frills service.
If you're considering using a fund supermarket, compliment the low cost benefits with financial advice before you buy. We can help you select the best products for your investment needs.

Fund of Funds

Fund of Funds are investment funds that invest in a range of collective investments rather than investing directly into shares, or corporate bonds.
The advantage to you is a professional manager makes the selections from a diverse range of complimentary funds, so you don't have to. You get a spread of investments, which effectively reduces the risk of investing in shares. If one company fails to perform as expected, the knock on effect is much lower.
Run by fund management groups, they select investments that fit a particular criteria, depending on what they are aiming to achieve. They are able to make timely disposals of under-performers and reinvest in funds they identify as being future star performers. 
This expertise does come at a price, as you will pay more for an extra level of management. It requires a certain degree of trust, as you are relinquishing complete control to the fund manager, who selects the individual holdings.
If you want to learn more about fund of funds and the risks involved, call us today.

Manager of Manager

A manager of manager fund, instead of investing in other collective investments, uses a range of specialist managers to invest directly into a range of investment asset classes such as equities, bonds or property.
The lead manager will ensure the mix of assets is right, appointing a team of specialists, each focused on their field of expertise. The advantage to you is specialist investment managers are working hard for you, using their knowledge to identify good growth opportunities in specific markets or sectors. 
This expertise does come at a price. There are two layers of charges, one to cover the overall lead management of the fund, the other covers the specialists employed to handpick the investments.
If you want to learn more about manager of manager funds, and cross compare the costs involved in using this investment channel, call us today.

What is Risk?

Risk means different things to different people. But, ultimately, in investments, it is the possibility that you could lose money or that your investment may not fulfil all your expectations. Your view of risk is likely to depend on your short and long-term investment goals and how much you can afford to lose.
In simple terms ‘risk' means that if you want the potential to gain more, you need to accept the potential to lose more. Whichever choice you make as an investor, you need to feel comfortable with the potential outcome. The key is to know what you are buying, and why.

Taking the Low Risk Road

With low risk products, such as a deposit account, the return you get is fixed for long periods. The amount of interest you earn may move up and down over time, but the changes will be small, far apart and advanced notification is usually given. Except for inflation, your capital invested will not change in value. It won't go down, but revenue you'll generate will be purely interest based.

The Rise And Fall Of High Risk Investments

Higher risk investments are less predictable. Taking a chance on the stock market can potentially deliver substantial gains. Take Company shares. Investors in blue chip companies are less likely to fall casualty to big fluctuations, but it has happened. If you purchase shares in the Alternative Investment Market, the risks are higher, as you're funding activities for relative newcomers. But if you pick a winner, the financial rewards can be good.

You will need to keep your eye on the market and prepare for swings in value. Result announcements, inflation, currency and political changes can impact the performance of individual company shares and entire sectors. Knowing when to pull out or stick with your investment is part of the risk. You may not lose money selling your shares, but a sudden leap in value could mean missing out on future gains.

Types of Risk

There are thousands of investment variations. Choosing what's right for you, how you think and feel about risk, is influenced by your individual knowledge and experience.

What is your initial attitude to risk?

Before taking out a product, you need to decide how much risk you are prepared to take. Answering this honestly is quite a challenge. Some key questions we would ask are:

  • How much do you value security?
  • Are you looking for income or growth?
  • Are you looking for short-term or long-term growth?

It's usual to have varying attitudes to your money, which are refined as your financial commitments shift through life. Right now, you may need a safe haven for your emergency fund; with your pension, perhaps you have time to recoup any losses, so can afford to take some longer-term risks; and with your rainy day cushion, taking higher risks in the hope of a happy and faster gain may appeal.

Seeking financial advice can help you to strike a balance, highlight the risks against rewards and ensure you feel comfortable with the potential outcome.

What is your attitude to continuing risk? 

As with any goal, you need to continuously review investment performance and revisit your strategy. It's important to be clear on how you would you react in certain situations.
For instance, you've invested in a high-risk fund, and the price falls. Now worth two-thirds of your initial investment, what do you do? Stay put in the hope it will rise back to, or above the previous value, or cut your losses and start afresh? Professional advice at the early stage can help you gauge your risk and security threshold as your life evolves.

How we can help?

Facing risk when you are thinking about how much you can gain is easy. But naturally, risk is accompanied by a number of unknowns. Seeking professional advice is important for identifying how you'd feel if your investment venture lost the same amount. With our support, you can understand the context of all your investment decisions and what you are committing yourself to.

Reducing Risk

Like life, placing all your eggs in one basket increases the risk of something going wrong. The obvious solution is to invest in low risk products. But, if you want to earn more than just interest on a savings account, diversifying, or spreading your investment, enables you the play the investment market a little bit safer.
It is a question of balance
This strategy is far less risky than focusing on one company, whose share price will rise and fall in line with their fortunes.
For instance, you buy shares in an ice cream company. A heat wave will usually deliver bumper sales. But what if it rains all summer? Splitting your investment with an umbrella company means if one does badly, in theory the other should counteract potential losses. Diversifying is often a good way to get a foothold on the stock market.

To make this form of investment easier, you can select a fund. Managing ‘collective investments', where your money is pooled together with thousands of other investors, each fund manager will buy a collection of stocks and shares, fixed securities, perhaps some commercial property and make cash investments. Unit trusts and Open Ended Investment Companies are typical examples. There are over 2,000 funds to choose from, divided into different types or sectors. below

Safety in Numbers

By smoothing the returns, funds are generally a far safer investment compared to buying individual company shares. Of course the potential for gain is reduced, but hopefully not as much as the potential for loss.
If you're considering making a pooled investment, talk to us first. We can save you time researching the products and sectors and quickly identify the right fund that meets your investment criteria.

What Is The Right Place For Your Money?

To answer this question, we need to uncover what motivates your investment and the returns you are seeking. Your investment choice will be as individual as you are. Where you are in life, your financial position and how you feel about risk is crucial to making a sound investment decision. Ultimately, professional advice will help you to pinpoint the right channel for your current needs.
This pyramid illustration will simply help you to understand the way that investment risks work and which products correspond.

Risk Pyramid

Advice is invaluable if you are thinking of investing, have any questions or want to check your existing investments are working in your best interests. After a detailed fact find to discover your hopes, attitude to risk and existing financial situation, we will find a selection of the best products to suit you.

Collective Investments

If money were chocolate, then collective investments would be the selection boxes. There are many types to choose from, depending on your risk appetite, your preferences and what you fancy investing in.
The idea behind collective investments is you pool your money together with others to buy a portfolio of stocks and shares. The advantages for inexperienced investors are clear; instead of focusing on one company, your fund buys a large larger variety of investments. The result; your money isn’t exposed to too much risk.

How it works

Collective funds, known as unit or investment trusts, take millions, sometimes billions of pounds and use it to buy a basket of shares. Only the very wealthy could ever diversify their investment portfolio as much. Generally speaking, the more investors in a fund, the larger the variety of investments.

What do they invest in?

Sectors, like retailers or technology, natural resources like oil and gas, loans to companies or governments, or commodities such as gold, sugar or frozen orange juice. Some apportion the investment by region, such as UK growth funds, Europe, the US and Emerging Markets. Each collective investment is different, and some will suit your needs better than others.

How do I choose?

To make collective investing easier, a number of facilities are available: Collective Funds, Fund supermarkets, Fund of Funds and Manager of Manager.
The main types of collective investment are:

Unit Trusts

Which invest in a selection of shares and other assets, to create a portfolio. This is divided into individual units, which can be bought and sold by investors.

Open Ended Investment Companies (OEIC)

These are also pooled investments, but as an investor, you’ll be issued shares instead of units. A single price is normally quoted for buying and selling.

Investment Trusts

Companies quoted on the stock market, which buy and sell other companies’ shares. Investors can earn dividends from the shares, as well as revenue.

Will I pay tax on any Returns?

If you invest directly into a fund, then your dividends will be liable for tax. However there are products available which offer some tax advantages on your savings:

Individual Saving Account (ISA)

A tax efficient wrapper, allowing all lower, basic and higher rate tax payers to save a maximum of £20,000 each tax year without paying tax on the growth.

Life Assurance Based Investments

For higher rate taxpayers and investors with larger sums to invest. Some products allow investors to withdraw funds and pay tax at a later date.
To feel confident that you are investing in a collective investment that is right for you and to understand the costs involved, seek our advice. Based upon your goals and individual circumstances, we can compare funds, sourcing a selection that will suit your needs better than others.

Unit Trusts

Unit trusts are collective investments. When you invest in one, your money will be pooled together with others to buy shares and other assets.

How does it work?

A unit trust is a fund that is divided up into segments called ‘units’. You, along with all the other investors, will be allocated units. As more people invest the number of units increase, and as they leave the number decreases. It is called an ‘open-ended” investment, because it can fluctuate in size.

Who looks after your investment?

An authorised fund management group, who employ a team of fund managers, manages it. They are tasked with choosing how to invest the trust's money. Each unit trust will have an investment objective that the fund manager will focus on.

What are the risks v returns?

The value of the units is directly related to the value of the investments the fund has purchased, so can rise and fall in price; it is not affected by supply and demand. The risks will differ between funds. Unit trusts invested in bonds tend to be safer than funds investing in shares, but the returns can be less.
Because the values fluctuate, you should consider a unit trust to be a medium to long-term investment. Realistically, be prepared to keep the units for at least three to five years.

What are the costs?

When investing in a unit trust, there are two main charges made for managing your fund:
An initial charge, also known as a bid-offer spread or front end charge.
At any one time there are two prices that apply, a price that units are bought , and a lower price that units are sold.

An annual management charge.

Usually a percentage of the fund amount, the fund manager will take this charge directly out of the fund every year.
The fees are always made clear, but it’s important to cross compare and understand what’s reasonable, as they can vary widely. Remember, any charges will reduce the gains or increase the loss your fund makes. Whilst the financial decision to invest is yours, talk to us first and we’ll present you with selective options that meet your personal investment criteria.


An Open Ended Investment Company (OEIC), pronounced Oik, works in a similar way to a unit trust. In fact, they are sometimes referred to as the modern version of unit trusts. When you invest in an OEIC, your money will be pooled together with other investors to buy shares in companies.

How does it work?

An OEIC is a company, which makes investments through a fund. As the investor, you will be issued shares. Like unit trusts, OEIC funds are open ended. This means the number of shares available increases when an investor buys into the fund, and decreases again when they are sold back to the company.

Who looks after your investment?

An authorised fund management group, who employ a team of fund managers, manages it. They are tasked with choosing how to invest the fund's money. Each OEIC will have an investment objective that the fund manager will focus on.

What are the risks v returns?

The value of your shares is directly related to the value of the investments the fund has purchased, so can rise and fall in price; it is not affected by supply and demand. The risks will vary, depending on the performance of the sector and region your fund is investing in. Investing in shares is subject to greater fluctuations. But equally, the rewards can be better. Risk and higher reward potential go hand in hand.
Because of these fluctuations, you should consider an OEIC to be a medium to long-term investment. For better returns and to ride out the rises and dips in share values, be prepared to keep an OEIC investment for three to five years.

What are the costs?

OEIC pricing is easier to comprehend than Unit Trusts, as they operate a single pricing system for buying and selling shares. In terms of the set up and running costs, there are two main charges to consider:

  • An initial charge
  • This will be taken out from your initial investment amount. Your remaining balance is then used to buy shares at the single price.
An annual management charge

Usually a percentage of the fund amount, the fund manager will take this charge directly out of the fund every year.
Fees are always clearly published, but it’s important to cross compare and understand what’s reasonable, as they can vary widely. Remember, any charges will reduce the gains or increase the loss your fund makes.

Is there a minimum investment amount?

You can invest either a lump sum or make monthly payments into an OEIC. There are no limits to how much you can invest.
If you’re unsure whether an OEIC is the right investment vehicle for you and need more information, contact us today.

Investment Trusts

Investment Trusts are less well known than unit trusts and OEICs, but they have many advantages. As companies, they purely exist to buy and sell shares in other companies. By putting your money in an Investment Trust, you’re effectively becoming their shareholder.

How do they work?

You, along with other investors, put your money into the Investment Trust Company. In return you become a shareholder. They will use your money to purchase shares in hundreds of other companies. If these companies do well, the Investment Trust portfolio will grow and so too should the value of your shares. It’s like playing the stock market, without the hassle of buying, monitoring performance and selling individual shares.
Unlike Unit Trusts and OEICs, these are ‘close-ended’ investments. This means that the number of shares available is fixed, enabling the fund manager to plan ahead and make better investment decisions.

How are the shares priced?

Because Investment Trusts are companies listed on the Stock Exchange, their shares are issued on the stock market. Although the actual value of the shares is determined by the investments in the fund, the price you pay for the shares will change according to supply and demand. If more people want to buy shares than sell them, then the price will rise. Similarly, it will fall if more people are trying to sell. As a shareholder, you won’t sell your share back to the trust, but to another buyer, via the stock market.

Who looks after your investment?

A fund manager within the trust. They are tasked with selecting companies to invest in and will have an investment objective to focus on. Being listed companies, each trust has an independent board of directors. They are accountable to shareholders.

What income will you receive?

There are also different classes of shares available. Some will pay ‘income’ at regular intervals, but will not entitle you to any of the growth in the fund. Others will give you part-ownership of the fund but will not pay a regular income.

What are the risks v returns?

Like any investment in the stock market, movements in value can be larger. There are different risk options, so you can choose one you feel comfortable with. Over time, volatility in the stock market has generally smoothed out, and on past performance, the returns have outshone lower risk forms of savings and more than compensated for inflation.
Realistically, they are intended to be a long-term investment aimed at people happy to stay with the investment for more than five years.

What are the costs?

Surprisingly, investment trusts are usually cheaper to buy than unit trusts. Fees will depend on whether you buy shares directly from the trust or via the stock market, but could include:

Dealing costs

To buy shares via the stock market, you’ll need to appoint an investment adviser or stockbroker to arrange the purchase or sale of your shares. You may also incur stamp duty costs.

Bid-offer spread or entry charge

The price that shares are bought for will generally be higher at any one time than they can be sold for. This Initial Charge won’t apply if you’re buying directly on the stock market.

An annual management charge

The fund manager will take out a percentage of the fund amount each year to cover administrative and management fees.
Fees are always clearly published, but it’s important to cross compare and understand what’s reasonable, as they can vary widely. Remember, any charges will reduce the gains or increase the loss your fund makes.

Is there a minimum investment amount?

Terms and conditions vary for each trust. You can also invest in one or more trusts through an ISA. To find out more about Investment Trusts and whether they could be good for your income growth, speak to us today.

Individual Savings Accounts (ISA)

ISAs are not products in their own right, but simply a tax efficient wrapper for your savings or investments. Through them you can hold stock market based investments or traditional cash savings.

How do they work?

To reward savers, any interest earned on savings or bonds, and any capital gains made on investments wrapped up within an ISA are tax free. It doesn’t matter if you’re a lower, basic or higher rate taxpayer; the tax advantages are the same. Best of all, you don’t need to include your ISA information on your tax return, saving you another headache.

Are there any limits?

You need to be over the age of 18 to take out an investment ISA. There is a maximum investment limit of £10,670 in an ISA within a single tax year (from 6 April to 5 April the following year).

What are the risks v returns?

The investment rewards and level of risk go hand-in-hand. Stock market based investments are not guaranteed and may fluctuate. However, any peaks or troughs should be averaged out through the duration of your investment.

Can I get at my money?

You can access your money at any time, but do remember, that dipping into your ISA fund, means using up some of that years allowance. If you have paid in the maximum, and take some money back out, you cannot top it up to the maximum again in that tax year.

What are the charges?

Equity ISAs may have an annual fee for investing your money in stocks and shares. That is usually deducted from the ISA itself. Check also that there are no exit penalties if you come out of the ISA arrangement early.

Need more help?

ISAs sound complex because there’s such a wide choice available. Rather than considering them to be a product, think of them as the umbrella for your savings and investments, protecting you from incurring more tax. You can find out more by calling us.

Life Assurance Based Trusts

Here your money is placed into Life Assurance funds. Traditionally used as regular premium plans in the form of endowments, to provide both investment and life cover for use in conjunction with interest only mortgages, they do offer benefits to certain investors.

Who do Life Assurance investments suit?

Most inexperienced investors prefer the simplicity of ISAs. But for investors with larger amounts than can be held in an ISA, higher rate taxpayers, and investors with a portfolio of different investments, these products can bring additional advantages.
For single premium investments, some products will allow higher rate taxpayers to make withdrawals from the fund now and defer your tax until a later date. For instance, when your income is no longer subject to higher rate tax.

How do they work?

When you pay into a fund with a life assurance company, this is used to buy a mixture of shares, cash and fixed interest products, such as gilts and bonds, to make your money grow. The funds you can select from typically include cash funds, property funds, fixed interest funds, managed funds, and with-profit funds.

What are the risks v returns?

Life assurance funds do give you access to the stock market, without the exposure to actually buying shares. These are regarded as long-term investments, aimed at people who want to build up their wealth steadily.

What are the costs?

Getting advice is essential before investing into these products, as the charging structures can be complex. Penalties may be charged for early surrender and fees may be higher at the beginning of some policies than others.
In addition, the tax situation will vary depending on the type of product, the term held for and whether you make a one off payment or contribute regularly.

Need more help?

Investing in a Life Assurance fund requires careful consideration, as it’s not right for everyone. To find out whether it would deliver benefits to you as an investor, contact us today.

Which fund to invest in?

When faced with so many fund choices, how do you even begin to pick a winner? After deciding what sort of risks you’re prepared to take with your money, you need to grasp exactly which circles you could be moving in.
Most funds fit into standard categories. This helps when we’re working together to narrow down the search and select a fund that complements your personal investment objectives. So let’s take a look at:

  • Choosing the right asset mix
  • Cash
  • Fixed Interest Securities
  • Shares
  • Property

Each investment category has different benefits and risks. Often, these fund types are combined to mix it up a bit and prevent investors being over-exposed in one area.
You may also have heard about futures or options. These are more speculative investments. You would agree to buy something like sugar or oil at a fixed price, in the future, effectively trying to pre-empt what will happen to the price before you buy. These are used by fund managers to complement the rest of your investments, but are not suitable for most private investors.

Choosing The Right Asset Mix

Asset mix is the term used to describe how different types of investments are blended together within a fund to achieve the desired outcome. For instance, funds may combine an equal percentage of cash and shares or could be more heavily weighted towards fixed interest or bonds. Your ideal blend will very much depend on why you’re investing in the first place.
Do you want your investment to pay an income straight away? If so, funds that are invested in fixed interested securities would provide this type of income.
Or are you thinking 20 years down the line? If you are saving for your newborn’s university education time is on your side, so you can utilise higher risk funds that in time are likely to pay higher dividends. Say, funds mostly invested in shares.

One thing is for sure; everyone has different requirements. We are all influenced by our current financial situation, life stage and aspirations. Each fund has a different asset mix and as financial advisers we can help you to identify which type of funds will suit your requirements, considering your attitude to risk and your financial aims.