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.
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
Yes. Please refer to Investment Portfolio Second Opinion
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.
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.
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.
After reviewing our clients investments and the performance of active fund managers we now focus on constructing portfolios using evidence based investing using Index and Smart Beta index funds. This allows capturing a wider spread of the market while benefiting from a lower overall fee structure.
A portfolio constructed using active fund managers will have an average MER of 2.2% whereas using passive and Beta index funds the underlying manager fees can be reduced to around 0.7%. A portfolio using active managers tends to have lower diversification perhaps 300-400 underlying securities whereas a passive/beta portfolio maximises diversification with investments spread across over 8,000 underlying securities.
In the last 10 years there has been a big swing towards using index funds in portfolios mainly driven by reducing costs to invest and that active fund managers have difficulty consistently beating the market.
Index funds in the broadest terms are funds which have a collection of shares in a certain percentage which is rebalanced back to this every six months. An index fund representing the S&P500 (top 500 shares on the US share market) would have the top 500 shares in the percentage that is represented by the market capitalisation of each share to the total.
Beta Funds are like index funds but will have filters applied. Dimensional Fund Advisors has applied this philosophy since 1981. Dimensional's investment philosophy is based on the works of Eugene Farma (Nobel laureate, professor at the University of Chicago) and Eugene Farmer (professor at Dartmouth College). Their research identified that fundamental factors generate returns. By investing in shares that have these factors, investors generate returns on par with market returns or above market returns in the long run. The factors identified were the market effect (shares outperform bonds long term), size effect, value effect, and profitability effect. Learn More>
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.
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.
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.
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.
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.
We believe there are 7 key questions you should ask your any financial adviser.
Please refer to the Seven Key Questions to ask an Investment Adviser