In Focus: Pathfinder Private Wealth - Developing A Wealth Management Strategy
David Grant, founder of Pathfinder Private Wealth explains how to make the most of your investments and make your money work harder for you.
What makes a good wealth management strategy?
It’s about knowing the difference between a philosophy and an outlook. An investment philosophy is a set of principles and beliefs that guide our decisions and behaviour. An outlook is based on trying to predict the future, something that is always uncertain and uncontrollable. We don’t believe that market movements can be consistently predicted, much less “timed”.
Our clients are working on multi-decade goals and we therefore look at multi-decade financial and market history. We look at the science and research and harness the power of the markets over our clients’ investing lifetime. We never make guesses around the short-term movements of markets and we do not attempt to ‘time the markets’ or ‘chase performance’. Instead, we focus on timeless wealth building principles.
Accept the future is uncertain
We accept that the future is always uncertain and we act rationally under the uncertainty. We make investment decisions based on probabilities and not on possibilities, because anything is possible but investment philosophy cannot be formulated from chaos theory. We acknowledge that the day-to-day ride is bumpy but we separate the long-term signal from the short-term noise.
Planning is the root of success
We put financial planning at the heart of what we do, because our clients’ portfolios are the funding medium for their plan. The portfolio is not their plan any more than outperformance is their goal. Put another way, for us investing is not just an exercise in chasing returns. It’s the way in which we help our clients do the things they want to do with their life. We believe that planning is the root of all financial success as it is the existence of a plan that enables us to tune-out the short-term noise and focus on the long-term.
Smart behaviour & asset allocation
Behaviour and asset allocation are the main determinants of long-term financial outcomes. Through continual behavioural coaching, education and consistent communication, we help our clients own, and continue to own (through all the peaks and troughs of the markets) the assets that will give them the greatest chance of achieving their deepest-held goals.
We acknowledge that our clients’ emotional wants (a desire for certainty) are often at odds with their financial needs (the return needed to achieve their goals). We also acknowledge that the best thing to do is often nothing. We help our clients do nothing when nothing is the right thing to do.
Know the difference between risk & volatility. We believe that risk is misunderstood and wrongly defined as volatility. We define risk as:
1. The probability of a permanent loss of capital and
2. The loss of purchasing power over the long-term.
Volatility is simply the rising and falling of prices around a constantly rising trendline. Capital is rarely permanently lost in a broadly diversified portfolio of equities held for the long-term.
Giving you the edge
We believe that most of the edges that existed several decades ago have been arbitraged away by technology. We don’t think about how we can be smarter than others, we think about what we can do that others aren’t prepared to do. That edge is in behaviour. Patience and discipline are the two deep edges that are almost impossible to arbitrage away.
Simplicity is the key to performance
We believe that our role is to simplify our clients’ lives. We have watched an industry use complexity to confuse clients and to justify fees. We take the opposite approach. We know that simple does not mean easy. In fact, when it comes to investing, simple requires more thought. We keep our clients’ investments simple through carefully and thoughtfully selected risk adjusted portfolios.
Is it important to have a portfolio of savings and investments?
Absolutely. Once you’ve considered your outgoings and budgeted accordingly, consider the balance between your different goals. Saving is important and the way you save and invest for these goals can determine success or having to temper your expectations.
Short-term goals may require more possibility of return with easy accessibility, whilst medium and long-term goals may allow you to make more diverse decisions on where your money goes and what it is invested in.
These are the main considerations that relate to how much you need saved:
Firstly, what are your short, medium and long-term goals?
Have you or will you have enough funds for your short-term goals?
Do you have a savings plan for your medium and long-term goals?
These may cost a lot and early consideration is the difference between realisation of these or not. Secondly, you can never predict how the future will turn out… from something as simple as breaking down in your car and facing high repair costs, to being made redundant, or your costs may increase by the birth of your children…. It is important to know that these could occur at any time and you need to have an awareness and consideration of this. The last few years have taught us how important this is.
Playing football is a short career. How important is it to plan for retirement?
It’s vitally important. An elite sportsperson needs to have an eye on the future from a very early age. The ever-present threat of injury, earning potential weighted at the front of their career, and the knowledge that there will come a time when they will need to build a life for themselves and their family outside competitive sport means that they need to plan for a whole host of different possibilities and opportunities. Our role is to help develop that plan, avoid costly errors and achieve financial wellbeing both now and after their retirement.
It’s never too soon to start putting retirement plans in place. A client might be thinking about retiring in the not too distant future. Or they could be at the start of their career and wanting to get off on a good footing. Whatever their time in life, we help our clients focus on what’s most important to them and make sure they take the right steps at the right time.
Helping clients plan for their retirement is a large part of our business. It’s one of the most important services we provide. We work tirelessly towards making everything as it should be when our client’s retire.
How can Pathfinder help players ensure they are making the right choices?
We implement the Pathfinder Process:
Discover
Our work begins with the client and not their money. Our initial meeting is with no obligation on your part. When you schedule your first meeting with us, we will sit down and have a discussion about you, your life, your family, your business, your dreams, your fears, your priorities. Before we focus on your money, we focus on what a great life looks like to you. We will start to define where you are today and talk about your realistic and manageable financial goals.
Develop
The development of a financial plan is a collaborative process. You are the expert on your life, and we are the expert guides. Together we produce a custom strategic plan that will create the context for your long-term financial decisions. We will start to look at ‘what-ifs’ and help you understand the trade-offs that are always present.
We will outline the most important tasks that need accomplishing to get you on track. We address everything from your life insurance to what you will be living on when you are 90 years old. We will present your personalised recommendations in a financial plan, which will provide you with clarity on your current financial position, a comprehensive overview of our recommendations, and a visual representation (Cashflow report) of your potential financial future.
Implement
If you are ready to work with us, we will get straight to work. We will open your investment and pension accounts and set a timeline for action on all the other aspects of your finances.
Reassess
A financial plan isn’t created once and financial planning is not an event. It is also certainly not a product. It’s an on-going process that flows with our lives. Our priorities and perspectives change as we move through the different stages of life. That’s why we meet regularly to continually reassess whether you are heading in the right direction or whether the direction has changed.
We anticipate and prepare for life’s events, and we build financial foundations that mean you always get a good night’s sleep.
The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
WHO WE ARE:
“Pathfinder” is defined as a person who goes ahead of you to find the best way to travel through an unknown area. For us, it means a simple mission to guide our clients to financial freedom and true peace of mind through intelligent wealth strategies and a wealth management process that goes far beyond investments.
With the backing of a FTSE 100 company, we combine a deep technical expertise and attention to detail with a thorough understanding of who our clients are and what matters to them most. With that knowledge we help them define where they want to go and create a custom strategic plan that gives them the best chance of getting there by aligning their financial objectives with their life goals.
www.pathfinderpw.co.uk Tel: 020 8042 0200 Mob: 07879 481 483
SJP APPROVED 28/3/2023
Pathfinder Private Wealth is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management products and services, more details of which are set out on the Group’s website http://www.sjp.co.uk/products. The ‘St. James’s Place Partnership’ and the titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives. Pathfinder Private Wealth is a trading name of Grant Wealth Management Limited.
