WEALTH MANAGEMENT PLAN
Our wealth management resources are designed to ensure an effective response to any issue and provide the assurance that every aspect of a client’s financial picture is considered in their overall wealth management plan. Our comprehensive financial plan integrates the following elements:
Savings
Saving for a specific goal; for example children’s education.
Investment
Investing to preserve and grow the real value of capital and income.
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Wealth creation: Life-style assets and retirement capital formation
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Wealth preservation: Capital protection + Income / Capital protection + Growth
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Income generation: Current income / Retirement income
Protection
Provides financial protection for you, your family and dependents.
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Assurance: Risk cover in the event of death, disability or dread disease
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Health care: Cover relating to medical and hospitalisation expenses
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Insurance: Cover related to life-style assets
Taxation
Planning to ensure optimal after-tax income generation and investment returns
Wealth Transfer
Estate planning to ensure sufficient liquidity and minimum estate duty
THE SEVEN-STEP PROCESS
To design and optimise each client’s strategy, we adhere to an unusually precise and disciplined seven-step process. This ensures the strategy remains in line with the set objectives, and our investment managers will regularly revisit each client’s situation and these steps.
RISK PROFILE
Each investor has a unique risk capacity and is entitled to a level of return that is commensurate with his risk capacity. The question is, how do we measure this capacity?
There are five dimensions of risk capacity and each one can be carefully measured with the AssetHouse Risk Capacity Survey. This thorough analysis is critical to pinpointing the optimal portfolio, which will provide you with the returns to meet your objectives.
Dimensions of Risk Capacity:
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Time horizon
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Investment knowledge
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Risk attitude
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Net worth
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Income and savings rate (income after expenses)
Click below to download the AssetHouse Risk Capacity Survey
Should you wish to have your answers to the survey analysed by AssetHouse and a comprehensive report sent to you, please fax your completed survey to +230 269 4400.
STRUCTURAL ANALYSIS
Protecting and enhancing your assets is at the heart of the Private Wealth Management service that AssetHouse provides. Wherever in the world your wealth is located, and in whatever form, AssetHouse has a wide range of solutions that can help you to enhance privacy and minimise the effects of taxation, expropriation, probate formalities and even family disputes.
AssetHouse has partners with particular expertise in the creation and administration of trusts and corporate structures. Our expert and experienced personnel and associates work with you, to create structures to suit your particular needs, establish trusts under various laws and arrange for the management of private investment companies in many jurisdictions. In addition, we can take over the administration of existing trusts, provide banking, custody and administration services.
Complimenting this, we offer assistance with the establishment of offshore companies and provide corporate services to companies that require a real offshore business presence.
AssetHouse Advisory Services
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Tax planning
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The establishment, management and administration of offshore trusts.
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The incorporation, management and administration of offshore trading companies, private investment companies, protected cell companies, hybrid companies, limited liability companies and captive insurance companies.
BENCHMARK SELECTION
This process involves the development and selection of an appropriate benchmark that reflects each of the client’s investment objectives. The selected benchmark determines the standard by which the success of investment decisions and performance can be evaluated. Risk is measured in terms of the expected deviation in performance against the underlying benchmark.
The terms “benchmark” and “index” are often used interchangeably. But while an index is most often used as a benchmark, a benchmark is essentially the starting point for evaluating success. A benchmark could be more generally defined as follows:
“An independent rate of return (or hurdle rate) forming an objective test of the effective implementation of an investment strategy.”
A benchmark may take any of the following forms:
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A well recognised published index
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A tailored composite of indices (AssetHouse method)
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A peer group (or “universe”) of similar funds or portfolios
What Makes a Good Benchmark?
Properly used, a benchmark should be a focal point in the relationship between the client and the manager overseeing the prudent management of the assets. Thoughtful choice of a benchmark will make the relationship between these parties more effective and enhance the value of the investment strategy.
Most clients recognise that currencies have a large impact on the returns of international and global portfolios. There is less appreciation however for the role that currencies play in the choice of an international or global benchmark. When selecting a multi-currrency benchmark, the client (implicitly or explicitly) makes both a decision on a set of underlying assets and a decision on the desired level of embedded currency exposure. Clients should always analyse the effects of currency movements and currency decisions separately from the underlying investments.
PORTFOLIO CONSTRUCTION
& IMPLEMENTATION
ONGOING ACTIVE
MARKET
Asset allocation — the balance between non-equity, equity and alternative strategies (hedge funds) and diversification within those asset classes, is one of the most important decisions we make together with our clients.
Based on our understanding of a client’s objectives, we develop and recommend our best asset allocation strategy.
To test its appropriateness, we analyse and present, based on historical data and our expectations for future returns, how variations in this strategy might impact both your risk and return expectations. Together with each client, we then agree on the optimal portfolio.
With our proposed portfolio and client profile as a guide, we align the proposed and existing entities in a client’s portfolio with the appropriate asset classes and underlying funds/securities, applying skills that truly distinguish us as multi-dimensional asset managers.
By identifying how each entity can contribute most effectively — within each client’s risk and return guidelines — we can develop the most efficient portfolio strategy. We then submit this plan to each client for review and approval.
IMPLEMENTATION
We set forth how we will implement and manage the proposed strategy in each client’s wealth management plan.
This document clearly delineates a client’s goals and investment strategy.
It also defines the specific investments to be included in a portfolio and how and when they should be incorporated.
The wealth management plan serves as the guide for our entire team, ensuring a common understanding of each client’s strategy, and consistent and focused execution of the plan.
We are highly sensitive to the investment goals of our clients and a significant part of our "value-added" is our ongoing evaluation of markets, benchmarks, and investment strategies.
The complexity of markets has risen dramatically, and a key component of our success is our ability to understand the underlying fundamental and technical factors that are driving returns in each asset class.
To extract full value from these insights we seek early identification of investment strategies and styles that inevitably arise in response to market changes.
Our research energy is oriented toward gaining these insights.
As we do no individual company research, our investment professionals are fully dedicated to analysing markets, strategies and mutual fund managers.
Monitoring Fund Managers
We examine monthly performance figures and perform detailed analysis of the returns to analyse the determinants of performance (performance attribution) and ensure that such performance is consistent with the investment style for which the manager was hired. We compare the manager's investment performance against his or her peers.
A manager trailing the index, for example, would concern us if the under-performance was attributable to unexpected factors and the manager continued to lag behind in his or her peer group.
Because each manager is expected to fulfill a specific role, we monitor for adherence to the investment discipline.
Additionally, our team meets weekly to discuss the performances of all the funds held by our clients.
DISCOVERY & GOALS
QUESTIONS TO GUIDE YOU
Investing in a lifetime of goals
Finding the right investment mix is based on your current financial situation, your age and time frames, your goals and on how much risk you can tolerate. Since all these factors change over time, asset allocation is an ongoing process.
AssetHouse has portfolio managers that will help you find the right asset allocation, and will help you build your financial future.
To realise a portfolio’s full after-tax performance potential, we analyse each entity within the asset mix including pension and provident funds, retirement annuities, real estate, insurance policies and trusts. In doing so we identify opportunities to use these entities to assist with the client’s long-term planning.
We also assess any concentrated shares, share-options, illiquid assets or other special situations that may impact our strategy. This step is a critical link between a purely theoretical asset allocation and a practical approach that fully considers each client’s current investments and long-term goals.
THE FINANCIAL PLAN
We draw on our extensive experience in asking the right questions to lay a solid foundation for each client’s plan. Clients are entitled to a level of return that is commensurate with their objectives and risk capacity and therefore the measurement of these dimensions is elevated to a very high level of importance. Each investor’s unique profile is derived from a rigorous quantitative and qualitative analysis and evaluation of criteria that includes the following:
Financial Profile:
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Current asset and liability structure
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Short-term liquidity needs
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Sources of capital and income
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Tax obligations
Personal Profile:
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Investment knowledge
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Risk capacity and time horizon
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Return expectations
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Service preferences
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Personal and family profile
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Estate planning issues
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Unique needs and circumstances
Working with the client, we use this information to clearly define their goals and expectations, and optimise their risk capacity exposure.
What are your goals and objectives?
To develop a solid savings and investment plan, decide what your money needs to do for you. The first step is to make a list of all your financial goals. Keep your list simple, but be specific.
How much time do you have?
Setting time frames for each of your goals is key because it can help determine how long your money will have to work for you. Determining a time frame for each goal will guide you as you select your investment options.
How much money do you have?
Before you make any decisions about investing, you need to assess where you are currently relative to where you want to be. Your total financial situation may dictate a more conservative or aggressive strategy, key factors in influencing the types of investments that are most appropriate for reaching your goals.
How much money do you need?
The type of investment you select and your time frame will substantially impact the amount of money you’ll need to begin saving for your goals.
What kind of investor are you?
No matter what type of investment you select, there are certain risks and potential rewards associated with it. Depending on the amount of time you have until you need your money, some of those risks may be more acceptable than others.
Putting it all together
Choosing just the right investments to reach your many goals, all with different time frames and all requiring significant amounts of money to achieve, can seem like a daunting task, especially since the factors influencing your investments and their success are constantly changing over time.
Asset allocation, dividing your money among different types of investments, is part of a successful investment plan. Finding the right mix of equities, bonds, alternative strategy funds, property and cash can help assure that your portfolio provides the potential to meet short- and long-term financial goals throughout a lifetime of investing.
Asset allocation also reduces the volatility of your portfolio and helps manage your risk. By diversifying your investments, you are not tied entirely to the ups and downs of the stock market in just one investment.