Our Philosophy Wychwood Financial Services
We believe that paying high charges for anything in the investment world is counter-intuitive. It is a myth that highly charged investment products provide for superior results. Our firm belief is that over the long-term our clients will benefit from developing a clear plan, and implementing this in a simple, easy to understand and cost effective manner. After all, we all want to keep more of our hard earned money.
Our philosophy is therefore as follows:
Create a clear and appropriate financial plan.
Suitable allocation to various assets based on the risk you are prepared to take.
Implementation at competitive cost generally using passive vehicles.
Help you maintain investment discipline through all investment cycles.
Review and rebalance to ensure continued appropriateness.
We see our role as educational and over time you may feel confident enough to maintain this philosophy yourself, with less input from us. We do however believe that our on-going services can add significant value to your Financial Plan over a period of time, if together we following these seven steps:
1. Create a Clear and Appropriate Financial Plan
Set attainable goals and create a clear plan to achieve those goals.
2. Cost Effective Implementation of Suitable Asset Allocation
Set up a suitable asset allocation based on risk profile.
Asset allocation is the most important driver of long-term performance and volatility.
Keep costs and charges to a minimum.
Every pound paid in charges is a pound off potential returns, which is true when markets are rising and falling.
Active fund managers generally overcharge and underperform markets.
High costs compound negatively over time.
3. Making Use of Tax Allowances
Use of a range of tax wrappers to shelter from tax.
Make the most of annual allowance’s to protect investment from tax over time.
Make use of tax relief which compounds positively over time.
4. Review & Rebalance
Check the plan is still on target to meet its goals/are changes required.
Maintain the correct asset allocation/risk over time.
Rebalancing guarantees buying low and selling high.
5. Maintain Discipline
Ensure you maintain discipline to make sure you do not miss out on market upside.
Avoid selling low and buying high.
6. Tax Efficient Income
Post retirement spending as tax efficient as possible in order to increase returns.
Spend from taxable accounts first, leaving the tax sheltered proportion to grow.
7. Total return versus Income investing
Generate income using total return from income and capital growth.
Do not chase yield/income because this can create extra risk.