In today’s financial world, it’s important to have an investment portfolio that truly meets your needs.
It should be well maintained and include an asset allocation that is appropriate for your personal financial circumstance, while also aligning with your attitude to risk.
Here at First Financial, we utilise a methodology that gets to the heart of these two critical factors to ensure that we develop your portfolio accordingly.
By creating your portfolio around these central considerations, we know that you will feel confident as you work towards your financial goals.
As part of our initial steps, we learn all about your financial needs. We have to determine your circumstance in order to be able to provide you with the appropriate professional guidance.
We bring this back to how much income do you require from your savings and investments to support your lifestyle goals. This might be a lot or it might be nothing at all. We then guide you through an asset allocation discussion that will help you achieve the necessary financial outcome.
By gaining complete financial clarity, we can help you secure your current financial circumstance and start planning your ideal retirement.
Attitude to risk
Your attitude to risk is the second integral component we need to assess before you start investing. A traditional financial planner will typically ask you to complete a risk profile. This is a series of questions which identify and measure an investor’s attitude to risk. It gauges risk tolerance, to determine the level of risk the person is comfortable with.
Traditional risk profiling often funnels you towards a psychologically common outcome. But we believe this type of risk profiling can steer people into an asset allocation that may not be appropriate for their time of life.
Our approach is different. We don’t just get you to fill on a two-page questionnaire… we talk to you about how you feel… we facilitate a thorough ‘Q and A ’ session with you.
In order to build a portfolio that is perfectly tailor made, we have to figure out what makes you tick – what motivates you at your core and what will help you sleep well at night.
During our discovery session we look to uncover your goals and aspirations… even the ones you might not have even thought of yet. Questions we ask will help you articulate your dreams and also identify the challenges you currently face day to day so that we can understand the lifestyle you want to enjoy now and into the future.
We look at the different asset options we have proposed through our professional guidance and discuss the details in depth to determine whether they will match your own personal values and ethics.
Another unique feature of our approach is our innovative Investment Philosophy. When we create investment portfolios, we make sure they are robust enough to endure market volatility… while still delivering the income you require.
We do this by separating the portfolio into three individual investment buckets.
- Bucket one is the ‘cash’ bucket and it holds 12 months’ worth of income.
- Bucket two is the ‘fixed-interest’ bucket and it holds two to four years of income in low-risk assets.
- Bucket three is the ‘growth investment’ bucket and it holds the five-year-plus growth portfolio. This is where we maintain your capital investments that are subject to market volatility.
Income moves from both the fixed-income and growth buckets to continually top up the cash bucket. When markets are performing well, profits transfer from the growth bucket to top up the cash bucket even further. If markets experience a downturn, like we saw in March 2020, we quarantine the risk in the long-term bucket.
Talk to us today
At First Financial, we see our role as one of collaboration. We provide market intelligence and prudent financial advice so you can make decisions that suit your investment profile, personal ethics and retirement dreams.
We know our partnership will deliver ongoing certainty that you are doing all the right things to achieve your individual wealth goals.