Our Investment Process

As we have no minimum portfolio size requirement, we have spent a considerable amount of time finalising our investment process with a view to providing all of our clients, regardless of investment value, with the same high quality, clear and repeatable investment advice.

In order to achieve this, our investment process is split in to four distinct stages as illustrated in the diagram below.

Risk assessment:

As this is the most important part of the investment process, setting the basis for everything else, we do not feel that it is sufficient to merely offer you a choice of low, medium or high risk and ask you which category you fit in as people's interpretations of risk can vary greatly.

Instead, along with establishing your degree of experience as an investor, we need to discover your real attitude to investment risk, associate reward and the volatility along the way.

To assist us with this, we will ask you to complete a risk assessment questionnaire* which will be scored accordingly and enable us to place you on a 10 point scale. You will then have the opportunity to discuss the outcome with us and agree exactly where on the scale you wish us to base our recommendations. This may of course differ depending on the area we are looking at, for example, some people wish to take a different approach to risk for their pension funds than for their shorter term savings.

*Our risk assessment system is provided by an independent source and we monitor it's effectiveness on an ongoing basis.

Asset Allocation:

It may surprise you to learn that it is estimated around 80% of investment returns come from being in the right asset class at the right time, rather than which investment you actually select to gain exposure to it.

Risk can potentially be mitigated by gaining exposure to a combination of assets classes, usually cash, fixed interest (such as Gilts and corporate bonds), property and equities.

For each of the 10 outcomes following assessment of your attitude to risk, we have a model asset allocation which has been devised independently from ourselves. This is known as the strategic asset allocation.

We also believe that long term returns come mainly from "time in the market" and not "market timing", as those who try to call when to make particular investments often miss the best time to buy and the best time to sell.

Economic conditions do of course change though and our investment committee will take a view each quarter as to whether to deviate from the model based on the outlook for each of the asset classes. This is known as the tactical asset allocation.

Investment selection:

Depending on the circumstances and objectives of each client, we will select an appropriate investment solution to satisfy the asset allocation. This may include one or more of the following options:

1. Multi-asset funds which have been graded to fit the appropriate attitude to risk

2. An asset allocated portfolio of individual funds

3. Discretionary investment management

Whichever solution is chosen, they will have all been selected and reviewed by our investment committee in conjunction with independent research.

At this point we would also take account of any specific ethical or socially responsible considerations which clients may wish to embed in their investment approach.

Ongoing Review:

It is essential that investment portfolios are reviewed on a regular basis to insure they remain appropriate for your objectives and consistent with your attitude to risk. This may require some rebalancing from time to time and the extent to which his is done will depend on your ongoing relationship with us, as noted in the section "Our relationship and fees".

Ethical Investment and Socially Responsible Investment

We appreciate that people are becoming increasingly concerned about ethical considerations and the impact of globalisation on the world and it's resources. We are able to provide specialist advice on investing in a manner which suits your personal requirements, whether that be the avoidance of particular industries or countries, or the inclusion of new energy technologies for example.

 

Contact us

Smythe & Walter
Office 9, Brogdale Farm
Brogdale Road
Faversham
Kent ME13 8XZ

01795 532090

email:

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