Savings & Investments

Investing by Design

Make your money work for you.

Savings & Investments

Our comprehensive Savings & Investment products are provided by The Spectrum IFA Group, a truly independent authorised brokerage, who are able to draw on a wide range of specialist flexible investment products, to produce a solution that meets your individual needs.

Investment Planning!

An Article by Brian Berney of The Spectrum IFA Group

When deciding where to invest your money do you rely on the recommendation from your financial adviser or do you have an idea or the experience to make your own choices?

The first decision you have to make is how much risk you are prepared to take and if you are prepared to leave your money invested for the short, medium or the long term. When designing a portfolio for my clients I don't leave it to chance I use a stochastic investment model developed by Tillinghast-Towers Perrin, a respected international actuarial consultancy. Such modelling techniques are not widely available for retail investors and are typically used by pension fund managers and large institutional investors, thus taking the guesswork out of which asset class a client should be investing in. A 6 page report is then generated explaining the different asset classes sectors and fund choices. The report considers an investment portfolio designed to help meet the clients investment goals within their risk profile and financial situation.

Different types of assets, such as equities or bonds, behave in different ways. The first step in forming any investment strategy is to achieve the right balance between the major asset classes. This "asset allocation" is fundamental to meeting the clients investment goals in the medium to long term. In fact, asset allocation can be as important as the choice of individual funds themselves.

A recommendation is then made after discussing in detail the factors such as the clients attitude to risk and their growth and income needs. A typical medium risk portfolio would be made up of the following asset classes.

UK Equity25%
Fixed Interest20%
US Equity15%
European Equity4%
Far East Equity3%

So let's look at these asset classes on an individual basis and what they represent.


Property funds enjoy relatively low volatility and provide good, reasonably stable returns over the mid to long-term. They also provide good diversifi cation from equities.

UK Equity

UK Equities have historically provided high returns over the mid to long-term. However equities tend to be volatile over shorter periods and the uncertainty over the future movements of their prices make them a riskier investment than some other asset classes.

Fixed Interest

The fi xed interest asset class includes both gilts and corporate bonds. Gilts are issued by the British Government and are considered one of the safest forms of investment. Gilts provide a good diversifi cation from equities but returns are generally more modest. Corporate Bonds are issued by companies. They are considered riskier than gilts but pay a correspondingly higher interest rate to investors. Bonds are negatively correlated with equities and so provide diversifi cation.

US Equity

These potentially offer a more diversifi ed portfolio than UK based equities. Exposure to the world's largest economy can offer the prospect of higher returns, but also a higher level of risk than UK equities. These funds are also subject to movements in currency exchange rates and these factors in combination lead to above average short-term price fl uctuations.


Bank deposits are virtually risk free. Returns are likely to be more modest than equity based funds and are without infl ation protection but the basic capital is protected from any loss.

European Equity

Not totally correlated to UK markets and therefore providing diversifi cation. Potential exposure to smaller emerging markets can offer the prospect of enhanced returns but a higher level of risk than UK equities. Affected by movements in currency exchange rates and therefore subject to short-term volatility.

Far East Equity

Exposure to markets that historically have experienced dramatic price movements and higher growth economies provide potential for higher future returns. Consequently there is a corresponding higher level of risk and short-term price volatility. Far Eastern equities also provide diversification from UK equities.
It is also advisable to review these asset classes and fund choices on a regular basis to asses fund performance and to make changes if required. The value of investments in the funds in each of the above asset class can fall as well as rise. You may not get back the original amount invested. The sterling value of overseas assets in these funds may also rise and fall as a result of exchange rate fl uctuations.

For a free confidential consultation on this or other types of investment opportunities pleas click on the banner below.

Savings & Investments

Life Assurance Investment Solutions Critical Illness Cover Retirement Planning Mortgage Advice Estate & Inheritance Planning