We are entering an unprecedented time in the investment markets. Government borrowing is racing away, wealth is accumulating in the pockets of the few, taxes are likely to rise and technology is changing everything almost constantly.

We think its fair to assume that there is far too much change going on to be either close-minded about any type of investment or overly confident that any one thing is going to lead the way in the future.

Investors need to understand the macro economic position of the current world moment. They should build their portfolios accordingly whilst looking to the trends of the future and be flexible and open-minded.

Question – Who cares about plumbing?

Answer – Nobody. Until their plumbing goes wrong and they have to figure it out.

In most situations nowadays there are three or four layers to an investment ‘cake’. They are:

Investment Platform

• Think of this as a bucket
• This is where all the administration of your investments goes. The regular payments that go into your pension and the rebalancing of the funds.
• Its important that this platform is easy to use, super secure and has a wide and unrestricted range of investments.
• Expect to pay up to around 0.35% per annum for this.

Investments (direct and funds)

• Think of this as the tennis balls that go in the bucket
• This is what drives your returns. You want good ones of these.
• There are thousands of options and infinite combinations. On a positive note there is going to be an optimum combination for any eventuality.
• Beware that often you cannot have a fund without a platform – so beware of just going off of fund fees – you normally need a platform too.

Investment Manager (sometimes)

• Think of this as someone picking the tennis balls
• Sometimes you pay explicitly for someone to choose your funds
• This person must add value above their fees, which can be material
• It is important to ensure you actually need one of these and, if you do, that they perform well. A good investment manager can be worth their weight in gold.
• There are plenty of breakthrough Investment Managers who provide plenty of value at a low cost

Financial Adviser (sometimes, but always with us!)

• The financial adviser is here to make sure 1, 2 and 3 (if you have or need number 3) are right for you and to ensure that they continue to be right into the future.
• They are also there to ensure additional monies are added in the most efficient manner
• They are also there to keep a check on your objectives and your investments and ensure ongoing suitability
• They are also there to ensure that your investments have the correct structuring for you. No one is saying your shouldn’t pay your taxes, but you should use all of your available tax bands and relief to minimise any further drag on your money.
• Finally, we feel that the guidance in the good times but, especially the bad, can help you keep your eyes on the prize and not make emotional decisions that can ruin your attempts to achieve your objectives.

Unfortunately, we are still waiting for flying cars and hoverboards (the ones that can actually fly – and not over water). What we are probably not still waiting for is a move to a lower carbon world and a world where the expectations of companies are moving to being about more than just a quarter’s shareholder returns.

Whether its Ethical, Socially Responsible Investment, Environmental Social and Governance, Sustainable or any other weighty themes, we think this is likely to be a sea change in investing. It is probably not to be ignored.

From day 1 we have founded Aretian Wealth Management to offer a full and appealing range of SRI and ESG based investments that fit with a likely future investment world.

We might also force some additional change for good in the process, which would be nice.

Plenty of people make a living managing money on behalf of their clients. Historically it has been a very good living indeed.

Unfortunately, it has also been a popular observation that, often, the investment managers have made more money than their clients ever have.

When commission for investments and pensions was banned by the FCA in 2013 it was the intention that the Financial Adviser would be a key part of restoring that balance between investment managers and their clients.

We think that a clearly stated fee-based independent advice firm gives the best possible chance of ensuring our clients make more money and achieve their objectives sooner than they otherwise would have.

Which is hopefully reasonably compelling.