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Frequently Asked Questions, FAQ

What makes LYFORDS different to other financial adviser companies?

We continually question, analyse and review. Our financial advisers use high quality investment research from different sources. All fees are fully disclosed and tax deductible to the investor. Alison and Richard have a combined experience in financial advising of over 55 years. We have experienced the highs and lows in the investment markets.

What are your fees?

The fees are clearly explained and very transparent. They are in the Secondary Disclosure Statement which is available upon request free of charge and without obligation

Do you review, or give second opinions on existing investment portfolios?

Yes. Please refer to Investment Portfolio Second Opinion

Will my money be safe?

Yes. Your investments are held in an independent custodial company, independent of Lyfords and only you can withdraw funds from your private investment account.

Please note that the capital value of your investment portfolio will fluctuate with market movements.

How do you determine how I should invest?

We start by accessing your attitudes and tolerance to investment risk and return using a psychometric risk profiling tool and matching your income and investment objectives.

Do you use research?

Yes. We use research from a variety of resources. Morningstar research (an internationally recognised research company) enables us to access research on more than 46,000 investment products. For asset allocation we have chosen to use 'Farrelly's research', an Australian company specialising in robust, proactive asset allocation modelling and the Occam's razor approach.

Do you recommend only managed funds?

No. We also recommend direct bonds and shares. Managed funds allow great diversification both from underlying investments and sub asset sectors.

Do you use index tracking funds or active fund managers?

There is a place for indexed funds like Vanguard and i-shares but financial markets are volatile. Using a good active fund manager is a better option than simply using an index tracking fund.

There has been much debate that by using an active fund manager you end up paying higher management fees than you would with an index tracking fund resulting in below market returns, however, these studies were done in the mid to late 1990's, in the middle of a bull market. It is our opinion that these studies do not apply in today's environment and that a good active fund manager can add to returns in excess of the general market return. In technical jargon a good manager will add "alpha" over the market "beta" return.

Can I view my investments at any time on the web?

Yes. You will be given access to a secure 128 bit encrypted web site where you can see how your investments are going. You can view your investment portfolio at any time.

How often do you review my investments and the funds in my portfolio?

The underlying investments selected are reviewed quarterly. Your investment portfolio is reviewed six monthly with an annual face-to-face meeting, or if you prefer, a telephone call. We also may review your risk/return profile and investments goals at this annual review to check that you are on track.

I see you are based in Lower Hutt. Does this mean you only have clients living in the Wellington region?

No. While our premises are in Lower Hutt we visit clients in the North and South Islands several times a year. We communicate regularly with our clients by phone and email. We also have New Zealand clients who are currently living overseas.

Our clients find distance is not an issue especially with email and being able to view their investments at any time directly via a secure web site. Any portfolio changes are agreed before they are implemented via email.

What fund managers do you use?

We use research, mainly from Morningstar research, to filter more than 46,000 investment options available in the Australasian markets to give a recommended list of between 45-60 investment funds. The Investments selected are reviewed quarterly. Where available we use mainly wholesale fund managers utilising lower fee structures. If retail investment funds are used all commissions and brokerages are rebated back to the client's cash account.

What is Occam's razor approach?

Occam's razor is a logical principle attributed to the medieval philosopher and English Franciscan friar William of Occam (or Ockham, 1287-1347). The principle states that one should not make more assumptions than the minimum needed. It underlies all scientific modelling and theory building. In other words, often when there are several options available, the simplest option is often the best.

In any given model, Occam's razor helps us to "shave off" those concepts, variables or constructs that are not really needed to explain the phenomenon. By doing that, developing the model will become much easier, and there is less chance of introducing inconsistencies, ambiguities and redundancies. 
 

Professional Code of Conduct for Financial Advisers

Are Financial Adviser regulated, what are the consumer protections? Financial advisers are regulated by the Financial Markets Authority (FMA) and are required to follow a Professional Code of Conduct for Authorised Financial Advisers.
 

What questions should I ask an investment adviser?

We believe there are 7 key questions you should ask your any financial adviser.
Please refer to the Seven Questions to ask an Investment Adviser