Traditional risk profiling
When you go to see a traditional financial planner, one of the first things you’ll do will be to complete a risk profile.
This is a series of questions which identify and measure an investor’s attitude to risk. It assesses risk tolerance, to determine the level of risk the person is comfortable with.
Traditional risk profiling can funnel you towards a psychologically common outcome.
We believe this type of risk profiling can push people into an asset allocation that may not be appropriate for their time of life.
Circumstance and attitude
Our approach is very different.
Investment recommendations are important, but getting your asset allocation correct is critical. We use a methodology that analyses your current circumstances which helps us arrive at an asset allocation. From there we discuss your attitude to risk and adjust the asset allocation so you can sleep at night.
We discuss the characteristics of this portfolio and make sure you are comfortable with them. The result is you have a portfolio you understand and is purpose built, aligned and in context with your goals.
Protect your future
Our innovative and unique investment strategy consistently delivers great long-term outcomes because you are building a portfolio that is relevant for your time of life, based on your current circumstance … and adjusted for your attitude to risk.
So for a retiree this strategy means that:
– Cash flow is delivered WHEN you need it so you can live life today. Our clients know that if there was an economic downturn they would have three to four years of cash-flow, allowing them to sleep more easily at night, knowing their lifestyle will not be affected.
And for an accumulator, this strategy means that:
– You have a portfolio geared to growth, to serve you well long-term.
At First Financial we prefer:
- Assets that produce significant stable income streams, over those where returns primarily come from capital gains
- Investing in large cap equities to give you a more stable cash flow, similar returns and a more transparent experience than in managed funds
- Mainstream assets that are transparent and easily understood
- Liquid assets that are easily accessible