Enjoying success as an investor is impacted by much more than simply picking the right stocks (or other investments).
In our many years of experience, it’s having the right strategy that’s key. This means getting crystal clear on where you stand now (including taking stock of all of your current assets and liabilities, opportunities and responsibilities), and also drilling deep to get focused on what you’d like to achieve (and when).
Having an experienced financial adviser (like us) who can identify areas where you can optimise your financial position and build a wealth roadmap for you, are the other crucial ingredients.
At 5 Financial, the strategies we develop for our clients favour low-cost methods of investment (such as those that feature low admin charges). This helps maximise the capital you have to work with, which means you are earning a return on a relatively larger sum.
Taxes are another critical factor. The strategy we develop for you seeks to legitimately minimise the tax you pay. (Having an in-house team of accountants and tax specialists enables us to cater to the needs of people with wide-ranging tax requirements, including those with highly complex circumstances.)
And it doesn’t end there.
Creating, protecting and growing your wealth is very much an ongoing process.
And having a trusted and knowledgeable financial adviser on your side is the best way to help ensure your success over the long term.
Why does this matter?
Well, the ebb and flow of the market causes the performance of different elements of your portfolio to vary. As a result – over time –the relative weighting of your total portfolio could become ‘unbalanced’.
This needs to be corrected (or ‘rebalanced’) so that your spread of assets matches your investor profile (i.e. how comfortable you are with varying levels of risk), as well as your goals and the timeframe in which you want to achieve them. For this reason, the wealth management team at 5 Financial rebalances our clients’ portfolios on a regular basis.
And when the markets get wobbly, as they inevitably do from time to time, it’s important to stay the course of your original strategy. (If you don’t, it would be easy to panic and sell out if the market is falling, but often all this does is crystallise the loss and means you miss out on a rebound.
Your 5 Financial wealth management adviser is very familiar with you and your strategy. They’re available to you to answer any questions you have and to advise you during these times. This helps ensure that any decisions you make will support your broader strategy and are in your best interests. In this way, we serve as your ‘investment coach’.
It’s interesting to note that research done by Vanguard* shows that an investor can earn up to 3% p.a. more on their investments by using the services of a financial adviser who:
· Builds your portfolio with low-cost funds
· Rebalances your portfolio
· Serves as an investing coach, and
· Minimises your taxes.
As described, these are the principles our financial advisers apply in our practice.
When we work with you, our goal is to help you make the most of all you have to work with.
If you’re interested in learning more, take advantage of our free, no-obligation consultation where one of our wealth management advisers will chat with you about your situation and goals. Schedule an appointment today.
*Vanguard research shows that an advisor can help an investor potentially earn more in net portfolio returns over time by following the Vanguard Advisor’s Alpha™ principles discussed in detail in our recent research paper. This research isn’t an exact science. The potential earnings of up to 3% more aren’t added over a specific time frame but can vary each year and according to your situation. The added value can materialize quickly and dramatically—especially during times of a rapidly rising or falling market, when you may be tempted to abandon your well-thought-out investment plan—or it may be added slowly. Source: Francis M. Kinniry Jr., Colleen M. Jaconetti, Michael A. DiJoseph, and Yan Zilbering, 2014.Putting a value on your value: Quantifying Vanguard Advisor’s Alpha. Valley Forge, Pa.: The Vanguard Group. vanguard.com/advisorvalue