Organising Your Investments and Pensions

Every financial adviser and individual investor has a different point of view on how to organise investment and pension portfolios.


Many financial advisers will rely upon guidance from the FCA that requires them to invest as per their clients Risk Profile into a model investment portfolio, regardless of market valuations. They will also follow guidance to invest in investments with low volatility.

The type of investments chosen will depend whether the adviser is a believer in low charge passive investments or whether they believe active funds are a better choice.

They will often ignore investment trusts as their compliance departments inform them that this type of investment adds an additional layer of risk, in addition this type of investment is often structured differently to unit trusts and quite complex to understand completely.


Individual investors tend to stick to what they know, (not a lot), in my opinion.

So, they will tend to select UK shares plus have a small number of overseas collective funds.

Individual investors, if they invest only in directly held shares, often tend to hang onto shares that have lost money and sell the shares that are showing a profit, without sometimes understanding the fundamental background that has led to the loss of value.

They are often obsessed with charges (even though that is only part of a proper decision-making process), because charges are a known, “known”.

Well known household names (blue chips) tend to form the bulk of their investment choices


Within the next few years almost all investors are likely to migrate their investment holdings to an investment platform OR dashboard. These are popular with Independent Financial Advisers, as they cut out a lot of the wasteful time that used to have to be spent in analysing investments, checking on prices before making any recommendations to clients.

Clients that are unfamiliar with investment platforms tend to think only of the charges that membership of a platform entails, and not the many benefits. Platforms often persuade investment funds to reduce their initial and ongoing charges, so that is an immediate benefit. Also, wherever you are in the world you can normally access your investment portfolio via a unique pin number.

Many platforms also allow for a 1% built in adviser fee, that will have some individual investors “running for the hills”.


Often referred to as Peer to Peer lending, the initial appeal of P2P was for ‘retail’ investors who were looking for opportunities to make their savings work a little bit harder than they would in a bank.

Unfortunately, this sector has been prejudiced by scams perpetrated by a small number of P2P lending platforms, so do tread cautiously.

These often are unregulated, so there is often no investor compensation.


A study by DALBAR using analytics and data from Lipper demonstrated that between 1992 and 2012, the S&P 500 returned 8.21% but the average investor only achieved 4.25%.

This difference in returns is often referred to as the “behaviour gap”. As human beings we are prone to making poor investment decisions because our emotions get in the way and distort facts and prevent rational thought.


Organising investments (particularly) when they are highly diversified and may include many investment models and an element of bespoke planning is quite demanding, particularly when investment trusts are included in the mix.

Rather than simply electing to hold low volatility investments, you should consider holding a proportion of higher growth global investments, as if they are held in the right proportion – this can reduce overall investment risk.

As for investment trusts, an average investment trust will tend to outperform a unit trust over the long term. If you are fortunate enough to select a high performing investment trust then this will (under normal market conditions) significantly out perform a unit trust.


To arrange for a second opinion on your investments simply phone Marie on 01189 347 920 or fill in our contact form to make an appointment and bring a copy of this blog and we will waive our normal first meeting fee.

Ray Best is a resilient Financial Planner with a unique approach to investment planning, his work ethic has propelled him from humble beginnings to be voted as a top UK Financial Planner by Vouched For (as published in the Sunday Times). These days he works with families with large investment portfolios or big inheritance tax liabilities, the first step, is to book a Discovery Meeting HERE.

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