Assessment of Risk
Understanding investment risk is the key to our management of each client’s portfolio. The starting point is always the accurate identification of a client’s risk profile which in turn considers both risk tolerance and capacity for risk. With our wealth of experience in this field, let us help you with investment risk management.
What we mean by risk attitude is each client’s willingness to risk a less favourable outcome in an attempt to achieve a more favourable outcome – this is the classic “risk/return trade-off”.
Risk capacity however is about the ability to sustain a less favourable outcome without compromising the original goals and timescales. As a result, risk capacity is affected by:
- Time horizons and the extent to which they can allow for the recovery of falls in value
- Total wealth, which can act as a cushion to adverse outcomes
Further information about Financial Planning:
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Whether you are looking to generate income from investments or put something aside for later life, sound financial planning is the cornerstone of success.
With our award-winning team of expert advisors, Fiducia Wealth helps you see the big picture on all financial matters. We offer comprehensive, impartial, personalised financial planning advice that gives you the benefit of our professional expertise at every step of your investment journey.
Unlike the financial advice you might receive from a bank manager or fund manager, which typically considers one or two subjects in isolation at a single point in time, our financial planning services are an ongoing long-term process based around a complete financial outlook.
Our specialists will help you to develop a holistic plan which will inform all future financial decisions. By weighing up the risks and rewards of each action in the context of broader goals, we ensure you stick to a course that prioritises long term success over short term gains.
By the same token, by regularly reviewing performance, we will always be in a position to recommend switching strategies when new and better opportunities arise.
The Financial Planning Cycle
Our financial planning advice services operate as a cyclical process, starting out with the formation of an initial plan which is then subject to regular review. We follow a six step approach as outlined below:
- Initial Fact Finding Meeting: The initial meeting is as much an opportunity for you to find out about us as for us to start gathering the personal and financial information we need about you. At this stage that information will look very much like a personal balance sheet.
- Personal and Financial Goals: In order to develop a plan that meets your financial aspirations, we need to know what your goals are. At this stage we will aim to agree priorities with you, sketch out initial courses of action and also begin liaising with other professionals, such as lawyers and accountants, as necessary.
- The Analysis: Once the fact finding and discussion phases have been completed, then it is up to us to analyse the facts and develop your risk profile. Determining the right level of risk exposure in the context of your long-term objectives is a crucial step, as much of the subsequent decision-making process will be based on assessment of risk.
- Draft Report: We will prepare a draft report containing our full analysis and proposals which will form the basis of a final round of discussions with you.
- The Final Report: Once we have reached agreement on our draft proposals, we will prepare the final report, outlining in full your long-term financial objectives, priorities, actions to be taken and the involvement of other professionals, leading to implementation of the agreed plan.
- Annual Meeting: Each year we will arrange a meeting with you to revisit the preceding steps in order to review and monitor performance of strategies over the previous 12 months, re-assess and make changes as necessary.
Financial Risk Management
Assessment of risk is a key part of our financial planning approach. Every client we work with has different goals and aspirations, some long term, some short term, some focused on making significant gains from their investments, others more inclined to protect their existing assets.
We base our financial planning advice on determining levels of risk that fit with your overall goals. If our assessment of the risk involved in an investment puts it outside an acceptable range for your objectives, we will advise you to look elsewhere.
However, we also understand that priorities and objectives change over time, which is why we will review your unique profile annually.
We manage our financial planning services through Fiducia Mastertrust, an integrated online investment platform which provides round-the-clock access to your portfolio.
Each client wishing to make use of our long-term financial planning advice gets their own Mastertrust account, providing complete visibility on the performance of all investment assets via a secure online portal.