How I Invest As A Financial Planner

As a business owner and Independent Financial Planner, I’m often asked by friends, family and clients, ‘how do you invest your ISAs and Pensions?’ 

As somebody who’s worked in finance for over 20 years, there is an assumption that I have my own secret/VIP access to investments. Like I have some guaranteed, higher-performing versions of the investments compared to what I recommend to my clients.

 However, the truth is, I take the same approach to what I offer clients and here’s why…

 

• I’ve made my own investing mistakes. 

In my early investing days, I’ve made the same mistakes I see clients making – Trying to buy individual shares following a piece of news in the media, trying to time markets or following a ‘Star’ Fund manager. 

All of these approaches quickly failed and left me out of pocket.

 

• I don’t have the time or inclination to manage my own investments. 

Like my clients, life is busy. 

The combination of a business I am passionate about, my family who I enjoy spending time with and a sprinkle of friends and fitness, means I have little time to continually research and manage my own investments.

 

• I don’t want to duplicate the work I do already. 

I already undertake a significant amount of research and due diligence on the full range of investment solutions for my clients, so why replicate or disregard this?   

 

• I believe it’s important to take your own medicine. 

I make recommendations on how successful business owners manage their and their family’s wealth. It would feel disingenuous if I didn’t take the same advice. 

I want to feel the same ups and downs so I can relate to what my clients are experiencing and feeling. I feel not doing this would hold me back when I’m presenting my advice.

 

So, what do I invest in as a Financial Planner?

 

Rather than name individual companies and funds, I will set out the key qualities I look for. This will give you something to think about and help narrow down what is right for you.

 

It’s important to say my individual circumstances, experiences, assets and future plans are individual to me and drive my investment decisions. This is why personalised investment advice is so important to take before making your own investment decisions.

 

What I invest in as a Financial Planner

 

• A Passive investment approach. 

I believe that in the long term, tracking the value of shares is more effective than trying to second guess the market using an active investment approach.

 

• Low Costs. 

Whilst you can’t control how markets move up and down, you can control how much is lost in costs. The lower the costs, the more can be retained in your ISA/Pensions.

 

1. Globally Diversified. 

I believe this approach means risk is spread across a wide range of companies, sectors and geography leading to greater stability.

 

• Focus on equities. 

I believe in owning successful, profitable companies rather than lending to them. That’s why there is little/no exposure to investments like Corporate bonds (loans to companies) and Government gilts (loans to governments).

 

I hope it’s been helpful to see how I invest as a Financial Planner. If you want to talk about what investment approach is right for you, get in touch for a Discovery Meeting here.

 

Take care.

 

Rik