Guide to
Financial
Planning
2013
Parkgate FS LLP
9 Venture Point
Stanney Mill Road
Chester
CH2 4GY
Tel: 0151-3484111
Fax: 0151-3426535
post@parkgatefs.co.uk
Contents
An Introduction to Parkgate FS LLP ........................................................................................... 3
Background ............................................................................................................................ 3
The Way Planning Used To Be ............................................................................................... 3
Our Dynamic Wealth Management Programme…………………………………………………………………..5
Initial Discovery Meeting………………………………….…………………………………………………………………..7
Research ..................................................................................................................................... 7
Providing Reports, financial health checks and forecasts ......................................................... 7
Recommendation of Specific investment products................................................................... 8
Implementation ......................................................................................................................... 8
Review ........................................................................................................................................ 8
Our Investment Philosophy ....................................................................................................... 8
A Sound Investment Approach .................................................................................................. 9
Conclusion .................................................................................................................................. 9
An Introduction to Parkgate FS LLP
The purpose of this guide is to provide you with a detailed view of the company and the
nature of the service we will provide for you. It is for information purposes only and does
not constitute advice.
Background
You may well be aware that the regulations surrounding our industry have changed quite a
few times in the past 20 or so years, which has certainly kept everyone on their toes.
However, the greatest development in that time was the introduction of the Independent
Financial Adviser (IFA) in 1988.
We firmly believe in the concept of not being tied to any single provider and applaud the
fact that the regulatory requirement needed to be classified as independent means we must
meet strict qualification and competence requirements.
However, the greatest frustration for us has been the fact that larger organisations in the
industry have unfairly had the power to influence the distribution and access to innovations
through their sheer scale.
We have decided to redress this by developing a programme that puts you firmly at the
centre of this distribution again rather than the large insurance companies and investment
houses and help you focus on what really matters about your financial future.
Ultimately, we want your needs to replace those of the insurer as the centre of influence.
This guide is an introduction to this concept, and focuses on the means by which you invest
monies, rather than any form of insurance or the other important financial planning
responsibilities we undertake for you.
Our service proposition clearly lays out the basis of our relationship, and defines our
responsibilities to each other in order to help you achieve your objectives.
The Way Planning Used To Be
Financial planning is about creating solutions to satisfy a financial planning need, which
generally involves using the characteristics or tax structures of ‘products’. These products
would generally be built by an insurance company or investment company based on certain
tax legislation.
For example, people often think of a pension as the source of their income in retirement,
when in fact the pension is merely a savings account that has been designed by an insurer to
exploit the tax legislation laid down by the government. One of the reasons that we have so
many different types of pension is that each successive government likes to make their mark
by tinkering with this legislation.
So, having identified a structure that would be suitable, we would then research the market
to find which providers had the most appropriate product in terms of cost, flexibility and
options. Once the provider had been selected, we would then select the investments from
whatever funds that company offered. Of course, their range may have been great at the
time, but they were never going to stay at the top so the next time that you needed to put a
new product in place, a different company would be selected.
If we were looking at using several structures, invariably the most appropriate company for
the pension would be different to the most appropriate for the Individual Savings Account
(ISA) so what you ended up with was a collection of policies with different companies,
selected at different times during your life, all with different investment options within
them, as illustrated below.
Portfolio
Portfolio
Pension
ISA
Pension
ISA
ISA
Pension
You
Pension
Our Dynamic Wealth Management Programme
The Dynamic Wealth Management Programme is designed to unbundle all of your planning.
In other words, we are moving away from talking about pensions, ISAs and investments as
separate entities and instead we are focussing on your wider wealth.
The way we do this is to create a single point from which all of your money is managed with
a defined, appropriate investment strategy. The illustration below shows how different this
is to the old way:
Portfolio
ISA
Pension
You
We are able to do this due to the emergence of ‘wraps’ or ‘platforms’ in recent years. These
are essentially technology driven arrangements that unifies your money so we can build a
portfolio of funds with many specialist investment companies.
We don’t have to just accept whichever funds that company decides to make available, but
instead we can work on a ‘best of breed’ basis, picking the most appropriate managers to do
different jobs. Furthermore, if we need to change the profile this can be done easily right
across your wealth.
In addition, and in reality most exciting of all, we can also apply the monies to different
structures, such as Pensions and ISAs all from one portal.
This arrangement enables us to tactically exploit the tax planning benefits of the different
structures to best serve your interests and objectives. Furthermore, this will greatly ease
the administrative burden of managing your monies.
Our Financial Planning Process has been developed with reference to ‘best practice’ in the
financial planning profession internationally and we seek to ensure that it is continuously
reviewed and updated as the economic and financial world changes.
We will set out the various factors we believe will prove important as we develop your
Financial Plan and how, once established, we will work with you to ensure that this plan
remains current and relevant to your circumstances. We believe the factors of most
importance are:



your objectives
your tolerance to risk
your lifetime cash-flow requirements
Once we have mutual understanding and agreement on these factors, we will construct a
financial plan, incorporating our recommended investment solutions, designed to help you
meet those objectives.
In developing your Financial Plan we break the Financial Planning Process down in to six
main phases:
Initial Discovery
Meeting
On-going
Review
Research
Suitable
Investment
Options
Implement
Provide Reports
& Financial
Health Checks
Recommend
Specific
Investments
Initial Discovery Meeting
Our job is to identify exactly where you are now, how you got there and more importantly
where you want to be in 5 years, 10 years and 20 years from now.
The Dynamic Wealth Management Programme is not a planning solution in itself; it is simply
a vehicle for you to use to achieve your financial planning goals. You may want to start to
look more closely at what you may want from your wealth. Blindly accruing assets really is
not an objective in itself unless we have a target or goal to work towards.
Most clients have vague objectives but have little appreciation of the likelihood of those
objectives being achieved or, indeed, what would be considered a successful achievement.
Objectives are often generalised, for example:
 If you are not yet retired, when would you ideally like to stop working?
 What income will you need to support your lifestyle in retirement?
 What hobbies or lifelong ambitions do you have that you have not yet fulfilled?
 What plans do you have for your legacy?
 If you are still working, have you considered your income and your expenditure
closely recently?
For any planning to be effective we must fully understand your objectives and therefore will
spend as long as it takes to identify exactly what you are looking to achieve. Your objectives
need to be realistic and achievable. In the event there is a gap between what you want and
what you can realistically achieve, we will discuss this with you and try to find a
compromise.
Attitude to investment risk is a measure of the level of risk with which an individual is
comfortable (their tolerance to risk) and it is critical that this is established correctly before
any advice is given. However, when assessing the appropriate level of risk for an individual’s
portfolio we must also consider their capacity for risk and their requirement for risk. There
are often instances when an individual’s requirement for risk is not aligned to their
tolerance and/or indeed their capacity for risk and this is a Financial Planning issue that we
will discuss with clients as part of our initial planning exercise and on an on-going basis.
This method of risk assessment helps us to identify how much risk they may be willing to
accept within an individual portfolio over the long term and provides us with a good starting
point in our Financial Planning exercise.
Research
Our role is to identify all of the resources available to you now, all of the resources
becoming available to you in the future, and more importantly, all of the resources you
might need to become available in order to satisfy your ‘life plan’.
Providing Reports, financial health checks and forecasts
When we have gathered this information we compile a comprehensive plan to show you
what your future looks like, and what actions you might need to take in order to achieve
your goals and maintain your desired lifestyle. A detailed explanation of where you are now,
where you want to be and how we get you there, including advantages and disadvantages,
risks and costs.
In developing your financial plan we use the most up-to-date modelling tools to generate a
Lifetime Cash Flow analysis. This enables us to develop and agree your overall long-term
strategy while considering different scenarios, thereby giving much greater depth to a
discussion about objectives than would usually be possible. Once completed, this analysis
allows us to begin to build a required asset return rate and top-level asset allocation
strategy to meet your objectives.
The whole process requires a joint effort, work to be done by both parties, a real
partnership.
Recommendation of Specific investment products
At this stage we will match specific products to your needs and make personal
recommendations for investment products and provider. We may also recommend an
appropriate platform service for arranging, safeguarding and administering your
investments. We will provide you with illustrations explaining the costs of these products.
Implementation
This is where the administration is done. Completing the paperwork, submitting it to the
financial institutions and ensuring everything is done that needs to be done. We will keep
you regularly informed of progress.
Review
The review process is an integral part of the Dynamic Wealth Management Programme. At
our review we will update any changes to your personal situation, your goals and aspirations
and your attitude to risk. We will review your portfolio and make changes as necessary to
make sure that you are on track for your goals.
Our Investment Philosophy
We adopt a Core Solutions approach to the investment of our clients’ monies and have
utilised both internal and independent expertise to select those solutions that meet very
clear client objectives within an individual investment risk profile.
Our strategy of adopting a Core Solution approach is fundamental to the relationships we
develop with our clients. Many advisers believe they add value to a client’s affairs by
‘second guessing’ the stock market and by trying to identify the next top performing fund.
We believe that we add value to a client by creating a sound, objective financial plan and
then by implementing an appropriate investment solution designed to meet those
objectives. Our focus is therefore on ensuring we meet objectives, not on promising market
outperformance. Interestingly, once we have identified the planning objectives,
outperformance of the stock market is hardly ever required – all that is needed is a sensible
investment approach to meet those objectives
A Sound Investment Approach
Our selected Core Solutions combine the power of risk profiling, modern portfolio theory
and the investment expertise of leading global investment teams.
We have adopted this approach for the following primary reasons;
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To ensure our clients’ investments are managed in the most efficient manner
consistent with their risk profile and investment time horizon.
To maintain stability and consistency with the asset mix of their investments – both
when initially invested and in the future.
To ensure continual and automatic rebalancing of the mix of assets in these
investment portfolios to ensure their on-going suitability in meeting a client’s
financial needs and objectives.
To create a high quality consistent approach to managing investments throughout
our company.
We believe that in adopting this approach, we not only deliver real value to our clients, but
create an efficient business that is well positioned to deliver a sustainable client service for
many years to come.
A successful investment strategy requires considerable dedicated resource. We recognise
that our most important role for our clients is that of Financial Planner – not Investment
Manager, yet it is essential that all our clients’ financial plans are underpinned by a fully
resourced set of investment solutions. It is for this reason that we have outsourced our
investment analysis to independent research and risk management consultants Rayner
Spencer Mills.
Rayner Spencer Mills is a firm of investment specialists, fully dedicated to researching and
monitoring global investment managers within the scope of client risk. Our brief to them
was simple – to deliver a series of risk-rated financial solutions, across a variety of
investment styles and to ensure that we are regularly updated and notified of any changes.
Consequently, we are able to offer our clients an extremely robust range of investment
solutions, all fulfilling the criteria we have outlined above, leaving us to do what we think we
do best – mapping out and achieving our clients’ financial plans.
Conclusion
We hope that this Guide has provided you with enough information about our service and
procedures to encourage you to meet with your prospective Planner. At the very least we
hope it will provide a basis for a discussion with you as to whether the service would be of
benefit to you.
Please do not hesitate to contact us if you wish to discuss any aspect of this Guide or our
service. We look forward to meeting you soon and hope we are able to develop our
relationship over the long-term.