What do you get from the Portfolio Management Service?

 

A Powerful Investment Solution

 

Our number one priority is to build and manage effective client portfolios.

 

The basic value of our portfolio service is this - by systematically exposing an investment portfolio to small and value companies in a scientifically rigorous manner we build portfolios with a higher expected return than the average market return.  This is a powerful proposition, as time and time again research shows how hard it is to achieve an above market index return. 

 

The portfolio management service distills years of investment research from financial economists into multi-asset class portfolio solutions that work for you.  Please click the following link to find out more information about these solutions.

 

Investment Portfolio Basics

 

An Ongoing Relationship with Financial Professionals

 

The most fundamental aspect of our professionalism is this - we are not owned by any financial service firm.  We do not accept commissions from any financial products.  Neither of these factors can influence our recommendations.  That puts us in a minority of the financial services industry - less than 5% of financial planners operate this way.

 

You work with experienced, tertiary qualified professionals, whose focus is improving your financial position.  Our clients are people who understand the value of quality advice and solutions, and are motivated toward improving their financial position.

 

Peace of Mind that you are Progressing Financially

 

Putting in place a plan is one thing.  Having the discipline to focus on that plan, and not get distracted, is another.  We work with clients to set financial goals, and then to work together to meet those goals.

 

Staying on course means dealing thoughtfully and strategically with portfolio opportunities.  For example, if sharemarkets fell tomorrow by 20% many people would panic and sell out.  Thoughtful investors will recognise the opportunity lower priced investment opportunities provide, and build their portfolio. 

 

We work with you to get beyond the emotional reaction of panic selling, to making thoughtful and strategic decisions.

 

An Acknowledgement that Fees Matter

 

Keeping investment fees low is an important input to being successful financially.

 

While we don't compromise on important items like research, professional development and professional indemnity insurance, we keep business overheads as low as we can to keep our fee levels moderate.  Our aim is to provide a high value, moderate fee service. 

 

We prefer to charge a flat annual fee capped at $4,400 per annum (GST inclusive).  We believe that setting an annual dollar based fee removes any hint of bias in the financial planning and investment advice given to clients.

However we also understand that this level of fee may be unsustainable for clients with smaller portfolio balances.  We therefore also offer an asset based fee. The maximum fee we charge you is 0.55% of your overall portfolio value.  This falls as the portfolio value increases.  By overall portfolio value we mean all the investments that are managed by us, including investment, superannuation and pension accounts, for you as an individual or couple.  The benchmark we most commonly see for fees for both commission based planners and independent financial planners is 1% a year. 

 

We receive a rebate from the portfolio administration service that we use of around 50% of their fee.  Unlike most financial planning firms we rebate this fee to you - it more than halves this cost for many clients!

 

The investment trusts that form the building blocks of our portfolios - that are both scientifically rigorous and historically successful - have an average cost of only 0.37% (based on a typical portfolio with 60% growth assets). 

 

Our asset based fee scales for managing these investments are set out in the table below:

 

Portfolio Range	Fee (inclusive of GST)
0 - $500,000	0.55%
$500,001 -	0.20%

 These fees are effective as of the 14th of August 2007.

 

This fee is capped at a maximum of $4,400 per annum (GST inclusive).

 

NB - There will also be investment manager and administration service costs that need to be taken into account to provide a picture of the total costs involved with investing using our approach.  These costs are dependant on individual client needs and preferences.

 

We have listed the value of the service already, but it is a fair question to ask what do we actually do for clients?

 

There are six levels to what we do.

 

LEVEL 1:  Regular portfolio reviews - this includes:

 

• A comprehensive face-to-face or conference call review of your entire financial situation at the end of each year.
• Individualised portfolio reviews throughout the year

These portfolio reviews are generally about keeping you on track, and checking your progress over time.  For instance we will complete a review based on income by August each year, after the major income payments have been received in portfolios.

 

LEVEL 2:  Contact from time to time - we recognise that financial questions pop up all through the year, and you are always free to get in touch to discuss this.  There is no extra cost involved with this contact.

 

LEVEL 3:  Portfolio Maintenance - we regularly review and monitor your portfolio, and take responsibility for administration issues such as cash transfers, asset allocation, pension payments and regular investments.  Not just every 3 or 6 months but as issues arise.

 

LEVEL 4: Professional development and maintaining relationships - this is crucial. You can be confident that we are spending time keeping up to date with financial planning strategy and investment management theory.  We also spend time meeting the guidelines that Dimensional - a key partner for us - have to remain approved financial planners.

 

LEVEL 5: Client Seminars & Teleconferences - through the course of the year we like to hold opportunities for clients to gather together to hear about recent developments and ask questions.  In previous years we have held seminars and teleconferences regarding the federal budget and discussion of and our response to current market developments.

LEVEL 6: Receipt of our "Quick Notes to Keep in Contact" letters - containing up to date commentary on the financial world and the investments used by our clients.