Professional advice in all matters is essential but particularly so when financial planning is required, given the complexity and often bewildering choices available.

Solving our clients’ legal problem is only be part of the solution we can provide if there are also financial or investment considerations, for example following a divorce, a death in the family or on approaching retirement.

In response to many requests from both business and private clients we set up our own independent in-house financial planning service in 2004, authorised directly by the Financial Services Authority. This compliments our other areas of work and provides the same high standard of professional advice. We believe we are unique in the Thames Valley in offering this service.
 
We provide advice in relation to the following:

• Protection of you and your family’s finances in the event of ill health or death

• Maximising the potential returns on your investments within agreed levels of risk

• Planning for specific goals such as repaying your mortgage, school fees etc

• Planning to produce a particular level of income in retirement

• Investment of a lump sum as a result of an inheritance or other event such as a pension sharing order

• Minimising the amount of tax you pay

• Preserving the value of your wealth in later life in order to:

    o Meet the costs of Long Term Care should the need arise; and

    o Maximise the value of your estate that is passed to your beneficiaries.

How do we provide our services?

The importance of independence

We believe that in order to provide you with the most appropriate solution for your plans, we should be able to access any product from any provider available in the UK.  We are therefore committed to remaining independent advisors, which means that we are not tied to any one insurer’s product.

In order to ensure our independence is not impaired by any ‘incentives’ from providers, our charges for our services are by way of a fee which we will agree with you before we undertake any work.  Normally this will be billed directly to you, but if you prefer, we can arrange for the fee to be offset by payments made to us from the insurer/investment houses (although this will increase the cost of the investment/insurance).

The process

In order to provide financial advice to you, we need to have a full understanding of your current financial position, your aims and objectives and, importantly, what level of investment risk you are prepared to take in order to achieve your goals.

Typically, there are four stages in how we provide financial advice to our clients:

1. Information Gathering

In order to gain a full understanding of your present position, we will arrange an initial meeting at which we will discuss your finances – your assets and liabilities, your income and outgoings, and your future plans, and, crucially, your attitude to investment risk.

Following that meeting, we will (with your written authority) obtain additional information in respect of your existing plans (your pensions, investments, insurances etc.) from the plan providers

At the initial meeting, we will discuss our fees with you, and these will be confirmed in writing for you to agree before we undertake any work on your behalf.  If you feel that our services will not be of benefit to you then you will not be charged.

2. Report and Recommendations

When we have a complete understanding of your current position and objectives, we will then prepare a written report setting out our recommendations for your consideration.

We make a charge for the production of this report and, as stated above, we will agree that fee with you before we start work.

3. Implementation

When you have had the opportunity to consider our recommendations we normally arrange a meeting to make any refinements you feel are appropriate, and to complete the necessary paperwork.
We arrange for policy documents to be sent to us so that we can check they are correct before issuing them to you.

4. Review

Because our clients’ circumstances don’t always remain constant, we recommend you regularly review your finances to ensure that they remain on track to achieve your objectives.

We offer a range of review options, from half yearly (or quarterly) meetings to simply issuing an annual valuation, and will provide the level of review you would like.

Because there are times when greater attention is needed for your finances, e.g. as you move from employment to retirement, the level of reviews can be changed to suit your needs.

We are, of course, available throughout the year should you have any concerns or experience any major changes in your circumstances.

In summary, whilst we are happy to arrange one off transactions for clients, we view financial advice as a continuing service that requires an initial long term strategy to be established, which is then regularly reviewed and updated.

Investment process

Outlined below is the process we undertake in order to arrive at the investment recommendations we make. There are essentially two considerations when making an investment.

1. Deciding the investment strategy

2. Deciding which product to invest through

1.  Investment Strategy
We agree with you an investment strategy by discussing your attitude to investment risk and the timescale for this investment.  In line with that strategy, we establish a blend of different types of investments (Asset Classes), such as equities (shares), fixed interest investments, property and cash and the proportion of each Asset Class that you should hold.  Having set a long term strategy (Asset Allocation) we then consider the current economic conditions and the outlook for each type of investment and adjust the amount held in each Asset Class accordingly.

We will typically establish a core investment holding for approximately 80% of your funds that is in line with your long term Asset Allocation benchmark with the intention that these core investments remain invested with little alteration over the long term.

We refer to the balance 20% as “satellite investments” and manage these more actively to fine tune your investments to your personal needs and to reflect prevailing economic conditions.

Investment Philosophy

We believe that Asset Allocation is the most important factor affecting your investment returns.  In most markets we believe that active fund management can benefit your portfolio and that the higher costs of active fund management, when compared to passive funds such as “trackers”, are worth paying. Where we perceive that active management is unlikely to improve returns then alternative approaches such as tracker funds and exchange traded funds will be utilised.

Where are Investments Made?

In order to provide cost effective access to a broad spread of investments we believe that collective investments provide the best solution for most clients.  Through these investments your funds are combined with other investors and a professional investment expert manages the investments in line with a set of objectives.  These funds are generally available via any tax wrappers (see below for an explanation of a ‘tax wrapper’) and therefore your investment portfolio can be managed across all your investments.

Across the market place there are over 20,000 funds available with a wide range of objectives and in order to identify and monitor these funds in order to ensure they remain appropriate for you, we will normally place your core investment under the guidance of a third party investment manager.  This will be achieved either by using a Multi Manager or discretionary fund management option.  For the satellite (fine tuning) element we will ourselves seek to identify specific funds or special investments.

What are Multi Manager Funds?

This type of investment operates at two levels.  At the higher level the provider sets the objectives and risk parameters of the fund and then what the underlying asset mix should be in order to meet these criteria. We will then pick those funds which will most closely match each client’s objectives and approach to risk.

The next stage is that rather than invest the funds directly into the market themselves, the provider will identify investment experts that they perceive to be the best at managing each Asset Class.  The advantage of this approach is that a team of analysts provide daily oversight of the funds, including risk control and the performance of the underlying managers and it then considers any changes of funds should, for instance, performance be poor or the manager of the fund move to another job.  The disadvantage is that due to the extra tier of management the cost of managing this style of fund can be higher. On balance, however, we believe the benefits outweigh the costs for most of our clients.

What are Discretionary Fund Managers?

Under this approach, we identify the objectives for the investment and pass the funds to an individual manager or investment house to manage within the remit given to them.  This approach can cover the management of your entire funds, if required, as many discretionary fund managers will develop a strategy that specifically meets your own objectives rather than a solution that is available to the general market.  As this approach will often mean that you are buying individual stocks and shares (rather than collective investments) we feel this is unlikely to be an appropriate solution unless your funds exceed £500,000. Below that level, there may be too limited a diversification of your funds and the costs can be disproportionate.

2.  Which Product
Different financial products are subject to different tax treatments, and in some cases restrictions on when you can access your investment (for example pension funds). We refer to the different tax treatments as the ‘tax wrapper’.  As part of our process we will seek to ensure that the investment product is tax effective but allows sufficient access to your capital.  Typically our solution will involve using tax preferred products such as Individual Savings Accounts, pensions and certain National Savings products.  Consideration will be given to specialist products such as Venture Capital Trusts, however, at all times the level of investment risk will take precedence over the tax treatment of the investment.

Summary

In summary we will help you develop an investment strategy that aims to achieve your overall objectives, and maximise your returns within the risk levels you wish to take.  We do this by setting a long term asset allocation benchmark around which we manage your funds dependent on the prevailing economic conditions. We will seek to maximise the tax efficiency of the funds by selecting the appropriate tax wrapper for your investments.

All of the people employed in our financial services department are paid a fixed salary, just like all the other employees in our firm, and our fees are related to the advice that we give rather than being dependant on arranging an investment or a life insurance policy. 

Our fees

We charge fees for the advice we provide to you and the work we undertake on your behalf which may or may not involve arranging investment and insurance policies.

Our initial meeting is completely free of charge.

If you then decide that you wish to appoint us to undertake work for you we will then agree a fee for this work.  We operate a very simple fee structure, which allows you to understand exactly how much our initial and ongoing advice will cost you.  Our fees are agreed with you in advance and in some cases we may require payments on account of those costs before any work is undertaken on your behalf.  VAT may be payable in addition to the fee and we will advise you if this is the case.

We charge in the following ways:

• Hourly Charge: if you wish to appoint us on the basis that we will bill you for the time we spend on your file, then we will provide you with an estimate of the likely level of the fee and if requested agree a limit which will not be exceeded without your prior approval.  Our rates are detailed in the current key facts about our services and are subject to revision from time to time.

• Fixed Fee:  This is a fee agreed at outset for advice and work undertaken for you and we will set out the work we will do and the agreed fee in our letter of engagement.  As an example you may wish to have a full financial overview and we may agree a fee of £1,500.  This means that this is the amount that we will charge you, unless otherwise agreed.

• Set Percentage:  This is the most common way of charging and the most popular with our clients and is particularly appropriate to investment and retirement planning.  We charge a fee which equates to a percentage of the funds invested on your behalf and this fee includes all the work and advice given in respect of investments undertaken on your behalf.  Current rates are given in our key facts document but will typically range between 1% and 2% of the funds advised upon.  This can include any new investments, increments to existing investments or transfer of pension funds.

• Review Service: To cover all the ongoing management of your investments, including reporting to you and meeting with you we charge an annual fee

dependent upon the level of service you require.  Typically this is based on 0.5% of the value of the funds we advise on subject to a minimum figure (related to the level of service required).

Contact us

For more information on these or any other financial planning matters, please contact Philip Grafton on 0118 951 6832 or email philip.grafton@blandy.co.uk
More information can also be found on our website www.blandy.co.uk

Blandy & Blandy is authorised and regulated by the Financial Services Authority