Financial Services Industry
Thank you for your interest in Solomon’s. In order to help you provide us with a mutually worthwhile service I have provided a summary of information that will help you to understand our client proposition.
We are a fee-based firm (we have been so since formation in 1999). As a result we are not interested in agreeing improved commission terms or motivated by higher commissions. In fact higher commission terms make no difference to us whatsoever. Any excess (above our agreed charges) commission/fee is rebated to the investment/product in the form of reduced charges to our client.
Clients have to complete a risk questionnaire, we currently use FinaMetrica, who we believe to provide the most robust psychometric test available at present. Clients are encouraged to reflect on their values and define purpose for their money, we can then use sensible cashflow modelling tools to help estimate the required returns and whether there is any mis-match between required returns and associated risk, when set against an appetite for risk and an ability to cope with loss. This then helps us to determine an appropriate level of risk for our clients.
We place emphasis on achieving an appropriate asset allocation mix for our clients. As a result clients have unique portfolios based upon a suitable “ideal asset allocation” but mindful of the reality of pre-existing investments and perhaps a limited fund range. We believe that appropriate asset allocation is key to successful investing. As a result, due to the basic principles of modern portfolio theory and correlation, a portfolio is “working” when holdings within it fall as others rise. It could also be the case that all holdings are rising, or falling and still be “working”.
Our role is to reduce risk where possible and to avoid adding unnecessary risk to a portfolio. We also strive to reduce the costs of investing, which means that we are likely to favour inexpensive index tracking funds where appropriate. This may include Open Ended Investment Companies, Unit Trusts, Exchange Traded Funds and Investment Trusts. However we are also mindful that some asset classes, markets and indices are difficult to replicate and sometimes this may even be counter-productive for risk-reward. Active fund management can be entirely appropriate for clients, dependant on their requirements and of course their existing arrangements, however in general terms we seek to considerably reduce the total expense ratio for portfolios.
We do not believe that investors, professional or private are able to consistently successfully “time the market”. We believe that this is the most common delusion that investors suffer and is widely observed. Investing requires a long-term mindset and a set of disciplines.
We have a number of clients that apply ethical or SRI criteria to their portfolio in a manner that is consistent with their values, but aware of the limitations and restrictions that exist within the SRI investment arena. A growing number of clients express interest in social impact investing and this is something that we can discuss. We are also open to the use and selection of Structured Products, EIS, VCT and even UCIS however we believe that these products tend to carry additional risk which is inappropriate for the vast majority of investors. We are also mindful that there are many ways to “invest” which might include alternative investments into wine, antiques, art and so on. Most significantly, we believe that a valid form of investment can be made into personal development, family, relationships, private enterprise and community. In short, investing is a very broad term.
Fund selection is very much the last aspect of our approach to investing. Actively managed funds should be able to demonstrate consistent outperformance for a reasonable and appropriate charge, otherwise passive funds should be inexpensive, but have sufficient critical mass as to warrant their sustainability as well as minimising tracking error.
We are very much of the opinion that when it comes to investing, one size probably fits no one. There are no absolute answers and the wisdom of investing is experiential not theoretical. That is not to say that we ignore the importance of good research to seek better performance, but the fundamental purpose of investing is not to “win” but to ensure that a client has funds that will provide for their chosen lifestyle and endure.
As we are fee based (and always have been) we are not biased towards one form of investment over another. The key is that an investment strategy is appropriate to our clients.
We appreciate and value informative and educational resources that can be supplied and included within our website or blog. We are aware that this can sometimes create problems for firms with their own internal compliance processes and we do not seek to cause harm or damage to any company. We will not knowingly publish resources that compromise data protection, copyright or compliance rules. We appreciate and value any input that you are willing to provide that helps our clients to understand aspects of the financial services industry or financial products.
We are directly regulated as a B3 small firm. Our compliance services are provided by ThreeSixty. We currently use Voyant lifetime cashflow planning software in conjunction with FinaMetrica. We are seeking to move towards online services and have worked with JCS and IFA Systems to this end. We have been Beta testers for both organizations and seek to utilize technology that enables us to provide even better services and communications with our clients, including Skype and GotoMeeting. We take training seriously and we use the IFP online CPD services, we favour using CII, PFS, ThreeSixty and IFP events for training, although not exclusively. We hold the required qualifications and gap fill for 2013 verified by SPS. We use platforms that work well with our database so that we can deliver services to our clients, we subscribe to and use Capita Comparator and The Platforum. We do not arrange mortgages or PMI. We do not currently provide Occupational Scheme Pension Transfer advice or Long Term Care advice. All protection products are arranged without commission, directly reducing premiums for clients. We expect and plan to remain as a whole of market, independent financial adviser post RDR. We believe that we work to ISO22222 financial planning standards. Our Professional Indemnity is renewed each September. You can find Dominic on LinkedIn and as a member of IFA Life and The Professional Development Group.
Further General Commercial Information
Please use this information wisely. It should help you to determine if your services or products are likely to be considered by us. We recognize that people make mistakes, so we advise truthful communication. Your call will not be put through to Dominic without being screened by prior email approval. Deception about the nature of your call is counter-productive. We do not advertise and we do not receive prospecting calls. We do not pay to be listed in directories. We are happy with our IT support, SEO and website, we have no requirement for translation services at this time.