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Modern Advisory
with Eternal Values

Investment Principles

Depending on your circumstances, you will have a unique set of objectives influenced by such factors as investment horizon, income and capital growth requirements, risk appetite, stage of life, estate planning and taxation.

In every case, we are committed to creating a personalised portfolio that provides the most effective investment outcome for you. The core principles that guide our investment recommendations are:

  • You are at the centre of everything we do.  Your adviser will work in partnership with you to deliver solutions to help meet your investment objectives, with regular reviews to ensure your asset allocation strategy remains aligned with changing circumstances.
  • Tailored solutions.  Catering for your particular circumstances is important. Tailored portfolios can improve tax efficiency given Australia’s complex capital gains tax and dividend franking framework. They can reduce risks associated with the highly concentrated nature of the domestic market, where bank securities dominate both equity and debt markets. They also allow for beliefs on ethical investing to be incorporated.
  • Capital protection comes first.  Many investors think of risk as the variation in month-to-month returns but our approach places greater emphasis on capital protection during periods of market volatility. We conduct extensive stress tests to build a portfolio for you that can help better withstand adverse conditions. 
  • Diversification to reduce risk.  Portfolios should strike a balance between maximising returns, reducing short term return volatility and having some protection against episodes of market stress. We typically recommend portfolios diversified by geography and asset class to improve risk adjusted returns.
  • Asset allocation drives portfolio outcomes. Academic studies have found that 90 per cent of investment returns come from asset allocation and this has long been our primary focus when designing portfolios. When building portfolios we primarily focus on longer term drivers of return such as sustainable profit growth and valuations in the case of equities. However, portfolios also need to remain dynamic in response to opportunities created by factors such as market over-reactions, economic developments, political events and regulatory changes.
  • Risk has different dimensions.  Standard deviation is not a total measure of risk. Investors must also consider other risks such as liquidity, concentration, inflation, political and regulatory risk. Liquidity is a particular focus; a high degree of liquidity is always preferred but there are some instances when investors are rewarded for holding less liquid assets. 
  • Life cycle considerations.  Your capacity to take on risk will vary with age and stage of life, and we will ensure your portfolio changes with your circumstances. For example, as you approach retirement you will likely have less capacity to deal with variations in income and return, so should consider switching to a more conservative portfolio.
  • Active management.  Market pricing is frequently not efficient because of behavioural biases and the short-term focus of investors. Hence managers with the right skills, resources and processes may be able to create excess returns with active strategies. However, we will also consider the use of passively managed funds when the potential for positive returns to active management after fees is low, or when a suitable active manager cannot be identified.
  • Partner with exceptional managers.  We are able to partner with exceptional external managers that we expect can achieve effective outcomes for our clients. However, we also have the capability to develop our own solutions where there is no suitable investment vehicle available, or we believe we may be able achieve a better result than existing products.