Investment Process

• Risk profiling and assessing individual customer needs’ are the key inputs – so we will spend time with you to discuss and understand this. We also need to establish what plans you already have in place.
• We also need to understand your need for income and/or capital growth as this will influence our recommendations and any special requirements e.g. Trustee’s Investments.
• If you require income, then this may require a bespoke approach; and you will need to consider both the impact of inflation and also the realistic level of income required if capital erosion is to be avoided over the investment time horizon.
• Assessing investment time horizons, capacity for loss and investment experience will provide us with a good understanding of your views and expectations from the investment strategy.
• Using this information we will tailor an investment portfolio to suit your acceptance of risk and financial planning objectives.

• We offer various investment options for each client – including own researched model portfolios or a broad range of funds from product providers. This is a critical part of the investment process and dependent on your specific requirements, we will select an appropriate solution to meet your objectives.
• We use our expert external and internal resources to monitor and select appropriate fund managers . They in turn research and select the optimum investment funds/ind ividua l stocks for the portfolios from the wide range that are available in the market.
• Our investment process is designed to avoid poor investment funds – as asset allocation and costs are the best predictors of future returns th is is where we focus our efforts.
• The key drivers for selection of funds within our model portfolios are consistency of return, volatility, fund size, fund ratings and overall costs.
• We also use risk metrics within our research which includes volatility, Alpha and Beta performance and Sharpe Ratios – these factors are important when analysing overall performance gained versus risk taken within a portfolio.
• We regularly review the performance of each fund we select over 6 months, 1 year, 3 years and syears as this provides a good guide towards the consistency of performance.
• The model portfolios we create are matched to the risk profile that is appropriate for each client – they are monitored on an on-going basis .
• We utilise the risk profiling tool provided by FE Analytics as it has a good range of questions, gives detailed reporting and publishes regular asset allocation data .
• Our client “factfind” process and Risk Tolerance Questionnaire produces an outcome within our designated risk profiles of between 1 and 5/ “Cautious” to “Speculative”, from which we then recommend an appropriate portfolio.
• Where appropriate we use Multi-asset “single fund solutions” which provide access to multiple asset classes, provide good diversification, and reduced risk by using more than one underlying fund, and use the skills of different fund managers to select the funds for individual client requirements.
• We pick these funds using the same measures as we select funds for our model portfolios, but put more of an emphasis on keeping costs low and offering a simplified solution.
• The funds we select are managed in line with the risk levels.

• Investment portfolios need to be reviewed regularly – which with our own model portfolios we do on a 4-monthly basis, so long as this is in line with the client’s risk profile. “Multi Asset”/”Fund of funds” are also reviewed regularly, although this may vary dependent on the provider and their investment strategy.
• “Multi Asset”/”Fund of funds” investments are most effective for smaller client portfolios – pooling and automatic rebalancing makes them both cost and tax efficient.
• The most effective tax wrapper for the client’s tax position may impact the selection of the method of investment.
• “Multi Asset”/”Fund of Funds” portfolios can be more favourably suited to clients with investment of less than about £100,000.
• We have a preferred list of Multi Asset/Fund of Funds options that we select for these clients.
• Above that level we will consider inclusion directly within our own investment portfolios and offer you the choice.

For clients with over £100,000 we have a number of solutions:

• You will have access to the Bateman Group model portfolios, and dependent on the products/wrappers required, you can alter the investment emphasis with each plan and whether to provide either growth or income.
• Alternatively you may wish to utilise a “Multi Asset”/”Fund of Funds” or a combination of these strategies.
• Dependent on your overall objectives, we may recommend that part of the portfolio is managed on a bespoke basis by us or by a discretionary manager.

• This is the process of re-aligning the weightings of your funds to match your original risk level and asset allocation.
• Re-balancing must be done periodically as your selected funds naturally “drift” as each outperform/underperform each other. This drift will, over time, move your portfolio away from your original risk profile .
• At each Portfolio review we will look at the asset allocation and fund selection and rebalance if required. We will ask your permission to re-balance the Portfolio to their original weightings; we will not process without your instructions.
• We will take tax implications and your individual circumstances into account when making this decision.

• Ethical/Socially Responsible investing – for those clients who wish to invest in ethical holdings, we can provide bespoke portfolios, which will be individually researched according to client preference. We will still follow our overall risk and asset allocation principles, but this solution will be client-led and agreed accordingly.
• Bespoke investment portfolios – dependent on individual client requirements, we will prepare a fully researched option of funds
• Stockbroking/Equity Trading – we have several solutions in this area; either directly via a recommended stockbroker or via the operation of a trading account. With regard to the latter, we prefer the options offered by wrap platforms as the charges are highly competitive (especially for small trades) and these established platforms generally link to our back office admin administration system for ease of client management and reporting.

• Wrap platforms or fund supermarkets offer a cost effective way for you to access tax wrappers (e.g. pension and ISAs). It makes your investment portfolio easy to manage and also reduces your paperwork.
• They allow you to hold investments from more than one fund manager. Any switches that are made may be faster using platforms, and are often processed either free or at reduced cost.
• With the majority of platforms you can see the value of your investments online – some with analysis to see how your investments have performed .
• Platforms also allow us to manage your investment tax effectively – for example, “Bed and ISA” as part of tax-year planning.
• Your investments are held by an independent custodian, potentially offering an additional layer of security .
• We select the most appropriate platform based on your needs from a recommended shortlist, based on our review of the whole of the marketplace.
• Our selection of platform will be partly driven by the costs of trading and availability of our preferred investment solutions.
• If we use a discretionary manager they are likely to use their own investment platform to manage your portfolio – the reports and valuations for this are likely to be quarterly.

• All investment includes some type of capital risk, and as past historic data has indicated, all asset classes can be affected by adverse market conditions and worldwide geopolitical events.
• The value of investments can go down as well as up and past performance is no guide to the future.