Why bespoke planning beats off-the-peg

  • Investment management
  • 2 minute read
Because no two investors are alike, it pays to have an investment portfolio tailor-made to your requirements.

As the UK continues to face heightened economic volatility and political uncertainty, investors face some finely balanced decisions – and there are no one-size-fits-all financial planning solutions. No two investors are the same.

This realisation is driving renewed interest in discretionary managed investment, where investment managers construct a portfolio of assets tailored for the individual. “Discretionary management is about recognising that each investor has specific requirements,” explains Nancy Curtin, Chief Investment Officer at Close Brothers Asset Management. “They may be looking for different amounts of growth or be prepared to accept different amounts of risk; they may have a preference for investing in companies that engage in activities they deem to be ethical, for example.”

Standardised investment funds can’t cater for such bespoke requirements. Instead, investors need a portfolio designed to reflect their circumstances. The key is to build a portfolio of assets that reflects the investor’s individual desire to balance risk and reward, building in diversification to ensure that if one area of the portfolio disappoints, another will compensate.

This effect can be achieved using a mix of shares, bonds and alternative assets such as infrastructure assets, commodities and properties. For example, investors looking to maximise long-term returns but less concerned about short-term volatility will tend to hold more shares than bonds. Alternative assets then provide uncorrelated protection – that is, they don’t tend to move in line with other investments, making it easier to spread your bets.

However, diversification isn’t simply about holding a large number of investments in your portfolio. “A bespoke portfolio should give you a broad spread of assets, but it should also provide other diversification benefits, too,” adds Curtin. “You need investments that will run over different timeframes and assets that can be accessed easily as well as those that locked into delivering long-term returns; you also need to ensure your portfolio is well-organised from a tax perspective, so that you’re making good use of wrappers such as individual savings accounts (ISAs).”

Working with a portfolio manager who can deliver this diversification should enable you to tailor your investments for your needs – managing risk and reward to achieve your financial goals in a way with which you feel comfortable.

The value of investments can fall as well as rise and you may get back less than you invested.

Get in touch today to start planning your future or to discuss your long-term financial priorities.

*First seen in The Times on 2 December 2017.

Please be aware, the value of investments can fall as well as rise and that past performance is not a reliable indicator of future returns and you could get back less than invested. Click here to understand the risks associated with investing. Calls to any number may be recorded for training and monitoring purposes. This site uses Cookies.