The role of a portfolio

Damien Rylett, CEO, IronBright

Combining the roles of life planner, financial planner and portfolio manager can lead to powerful and life changing moments for clients

Our bright thoughts about IronBright began with a blank canvas in 2011 when the founders of Brunel Capital Partners were preparing to set it up as a new Financial Planning business.

We were on garden leave from previous employers, taking time to think about what kind of financial planning and investment service we really, really wanted to provide to our clients.

If it was our money what would we do with it?

What mistakes have we seen made by others that we can avoid?

Those of us who were involved in creating Brunel at the outset had all experienced takeovers, seeing us move from small financial advisory businesses to larger ones. Along the way, something had gone missing. That ‘something’ was the ability to look after our clients as if they were members of our own families and put them and their wishes and needs ahead of everything else.

From this position, we were confident the rest would follow.

For years and for most, investing has meant performance, market indices and returns.

We believe this is the wrong focus.

We believe personal and lifestyle financial planning lies at the heart of the investment process.

An investment portfolio is simply a funding media for the plan.

Our investment approach had to be tailored precisely to our clients’ financial planning needs and investment returns driven to achieve financial planning objectives.

Around the time we were developing our thinking, a number of things served to reaffirm our approach. The then Financial Services Authority issued GC12-06 a Guidance Consultation paper: Replacement Business and Centralised Investment Propositions. This was the regulator publishing a guide to what was good practice and what was bad. It highlighted the dangers of everyone being shoe horned into a central investment proposition which would inevitably drift from clients’ individual risk profiles. It laid out the good principles of a full understanding of a client’s financial needs encompassing objective setting and planning.

By chance we came across JM Finn, private investment managers, who set up a team to handle the requirements outlined in the FSA Guidance Paper. They helped us with our initial proposition and built our portfolios to meet our needs. From there, we moved to set up our own investment arm which now operates with the research and guidance of Quartet Investment Managers.

Just talking about the money can be described as the road to nowhere.

People don’t jump into their cars, start the engine and drive aimlessly, with no thought of where they are heading. It’s amazing however, how many people take this approach with their investment portfolio; often involving huge sums of money that have taken many years of hard work and saving.

Without a clear objective or idea of what you want to achieve it’s very difficult to bring meaning to money. This meaning is developed when you help clients answer questions like ‘How much is enough?’ and ‘When will they reach financial security?’ if they haven’t already.

No financial plan, no portfolio

Our job as financial planners is to help clients get and keep the life they want. To inspire them do what they want before it’s too late. To offer peace of mind and security of knowing where they are heading financially. Our job is to help clients understand their number and then to help them accumulate it, manage it, protect it and enjoy it.

Cash flow modelling helps us calculate the number and whether they haven’t got enough, have too much or are just right.

When we know, we can turn our attention to money and investment.

The “not enoughs” may need to invest more or take more risk. The “too muches” may be able to reduce risk on their portfolios as can the “just rights”.

Combing the roles of life planner, financial planner and portfolio manager can lead to powerful and life changing moments for clients. For Financial Planning professionals this is extremely rewarding.

IronBright now helps us deliver the funding mechanism for the plan.

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