YOUR PORTFOLIO DIY stockpicking their own research to invest in individual shares , but do so in a ringfenced and smaller proportion of their overall portfolio . “ We ’ ll include those assets within their financial plan , view all their assets holistically using cashflow forecasting , but we don ’ t actually advise on those individual shares ,” he explains . He adds that for most of their wealth , these clients still take on advice , relying on funds and other collective vehicles to better manage risk .
Generation to generation Where shares have been inherited , and are likely still held for sentimental reasons , Perera-Slater says they typically sit at the smaller end of the market-cap spectrum , such as AIM stocks , and are passed on for inheritance tax mitigation . If clients have deliberately built share portfolios from scratch , they often tend towards household names . Inheritance is a common entry point , often with legacy portfolios from the days of broad public issues being bequeathed , says Neil Whelan , investment director at RC Brown .
What you pay for
Contrary to the opening adage , if you want something doing properly , you should arguably pay someone who does it for a living – so long as they charge a reasonable price . But with fund management one of the most handsomely remunerated professions around , it is worth asking what exactly you are paying for .
Fund managers are surrounded by rigour , process and analyst teams to inform and challenge their decisions . They can ’ t allow themselves to be swayed by a good story or charismatic finance director .
Many have experience of market cycles , know what to look for in rallies and crashes , and can look business leaders in the eye as they compare projections against market dynamics and pressures from rivals or other external sources .
“ Most clients , unless they work in the industry , wouldn ’ t know how to read a corporate balance sheet ,” says Steel .
“ They won ’ t be partaking in the forensic analysis that you would expect from a fund manager .”
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