LWM Consultants - Investors in values

Investors in Values

LWM Consultants Ltd.Financial Planners

“Be the difference that you wish to see in the world”

1. Driven by passion2. What is financial planning3. Service proposition4. Client segmentation / profile5. Delivering solutions6. Fee structure7. The future8. Helping others9. Contact10. Summary

Agenda

Driven by passion

At LWM we have built a team of highly experienced industry professionals with over eighty years combined experience

As financial planners we believe in the importance of continued professional development

These qualifications demonstrate our expertise and technical skills in Financial Planning to both clients and peers alike

Key adviser qualifications – Paul Berry, Diploma in Financial Planning and Nicola McKissick, Diploma for Financial Advisers

Full list of all qualifications available via http://www.lwmconsultants.com/public/investors-in-values/qualifications/

Driven by passion

http://www.lwmconsultants.com/public/investors-in-values/qualifications/

http://www.lwmconsultants.com/public/investors-in-values/qualifications/

“A key characteristic of the silent generation is that they don’t talk about money – not ever! Simply put, talking about money

is taboo, impolite and a sign of bad breeding”

LWM Consultants is driven by a passion to break down these taboos and encourage people to engage with their money, in a way that is interesting and thought provoking

LWM Consultants believe that if you break down the silent generation then they can share financial education with the next generation, and create a snowball effect

Driven by passion

LWM has breadth and depth of experience across all aspects of financial services from financial planning (a very general term) to marketing and product design and investments

The business has adopted a straight forward model where the client is central to everything we do

We believe that understanding goals is key to understanding a client, and only then can you develop solutions

Driven by passion

We have simple a fee structure, simple solutions and portfolios* which have been tried and tested by our clients for many years

We use some of our profits to fund our charitable trust which can then be used to support causes we believe in and can help in making a difference

Ultimately we believe that financial planning is vital to people’s well being; passion is the key, forget the noise - if the client is central to what you do then your passion is to do the best for them and that is why LWM Consultants exists

*Although we aim to provide a positive outcome, past performance is no guide to future performance and investments can fall as well as rise

Driven by passion

What is financial planning?

“You may have come across the termfinancial planning and wondered whatdoes it mean, and does it apply to me?”

What is financial planning

Provides direction and meaning to your financial decisions

Considers the whole picture, so one decision impacts on another

Enables you to consider both short and long-term goals as part of your overall life goals

Enables you to adapt more easily to life changes

Makes you feel more secure that your goals are on track

Financial advice - myths

Financial advice is not about selling you a product

Financial advice is about working with you to develop a long-term financial game plan, i.e. financial planning

Financial advice does not have to be paid for in cash upfront

Financial advice can be paid for out of the investments used to deliver your long-term financial game plan

Financial advice – why?

You may need expertise you don’t possess in certain areas of your finances. For example, an adviser can evaluate the level of risk* you are comfortable with, and adjust your retirement plan to reflect this

You may feel you don’t have the time to spare to do your own financial planning

You have an immediate need or unexpected life event such as a birth, inheritance or major illness

*Risk is the potential that a chosen action or activity (including the choice of inaction) will lead to a loss (an undesirable outcome)

Financial advice – why?

You feel a professional financial adviser could help you improve on how you are currently managing your finances

You know that you need to improve your current financial situation but don’t know where to start

What to expect from a financial adviser

A financial adviser will work with you to develop a game plan that fits your financial circumstances and tailors it to accomplish your goals by:

Looking at the whole financial picture including your goals

Understanding your tolerance for risk* and what your expected returns are

Providing an unemotional assessment of what needs to be done

Delivering a comprehensive annual review

Keeping you informed

*Risk tolerance is the degree of uncertainty that an investor can handle in regard to a negative change in the value of his or her portfolio

The process

Analysing and evaluating your financial goals

Understand what your goals are

Analyse your information to assess your current situation

Determine what you need to do to meet your goals

Develop and present financial planning recommendations and / or alternatives

Deliver financial planning recommendations that address your goals

Go over the recommendations with you to help you understand so that you can make an informed decision

Listen to your concerns and revise the recommendations as appropriate

The process

Implementation of financial planning recommendations

Agree how recommendations will be carried out

Adviser will carry out the recommendation

Monitoring your financial planning

The adviser will review your situation and adjust the recommendations, if needed, as your life changes

Expectations

When working with a financial planner it is important to have realistic expectations.

Set measurable goals

Rather than saying you want to be comfortable in retirement, quantify what you mean, the adviser can help you more if your goals are quantifiable

Understand the effect of each financial decision

All financial decisions are interrelated, so a decision around a child’s education may effect when and how you meet your retirement goals

Review your financial situation periodically

Financial planning is a dynamic process

Goals may change over the years due to changes in your lifestyle (i.e. an inheritance)

Your financial adviser will meet you at least once a year to review your financial situation, but you can call them anytime if things change

Expectations

Be realistic in your expectations

An adviser cannot change your situation overnight but they will be able to take care of the lifelong process to deliver your goals

Realise you are in charge

You are in charge, make sure you understand what your adviser is doing for you and what they are offering

Make sure you provide the adviser with all the relevant information on your financial situation – no matter how small

Ask questions and play an active role in decision making

Service proposition

Our proposition is to ensure we are there for our clients throughout their financial journey – whether this is building and growing assets, or using assets to provide an income in retirement

For new clients we follow a three stage process:

Assess – the first stage is to understand a client’s financial position, and what they are looking to achieve

Design – working with clients to set realistic targets and plan the financial actions required to achieve those

Build – only once we have agreed the goals we build the solutions

Service Proposition

For existing clients our service is about maintenance and service, this is arguably the most important part of the proposition this ensures the client continues to stay on track to deliver their goals

We split on-going service into four areas:

Delivering on goals – we don’t outsource the management of client money. We offer six core investment portfolios* which have a three year track record and which we build and manage ourselves. These portfolios are the corner stones for the majority of our client’s investments.

We believe long term holdings are crucial to success so we select fund managers by listening to, reading about and meeting as many industry professionals as possible to really understand their rational and process.

Each year we will offer to review attitudes to risk and rebalance** portfolios, this is important because it protects against investment drift and provides a consistent risk structure.

*An investment portfolio is a group of assets (investment funds, investment trusts etc) managed by us. The portfolios have different grades of risk and reward. This is the expected risk taken to capture the returns. So a defensive strategy will take less risk and therefore the expected reward would be lower.**Rebalancing is the process of realigning the weightings in one’s portfolio of assets. Rebalancing involves periodically buying or selling assets in your portfolio to return to your original split of investments. It may also involve changing some of the assets or holdingsAlthough we aim to provide a positive outcome over the long term past performance is no guide to future performance and investments can fall as well as rise

Service Proposition

Sharing information – we share knowledge with clients. Regular updates via our blog on market news, general investment ideas as well as including industry views from the investment writings of respected third parties.

Our portfolio information is fully disclosed on our website, detailing current holdings as well as performance information. We also include our quarterly investment committee notes and notes from fund manager meetings. We believe that clients should have to hand all the information we have and our interpretation of it.

Delivering life time goals – we offer to see clients at a minimum annually and usually more regularly.

This enables us to identify any changes to circumstances, and review whether we are delivering on expectations.

We continually review the suitability of portfolios, if necessary adjusting investments to reflect changes in clients circumstances or requirements.

Access to us – clients can meet, call or email us at any time.

Service Proposition

Client segmentation / profile

We do not believe that more clients, or focusing on one group of clients (young accumulators or valuable clients), necessarily means having a better or successful business

We work with a small number of clients who value the service we provide, and who view the relationship as a partnership

We have tailored our service proposition to reflect this group of clients, and where necessary bespoke to adapt to individual needs

We believe that the strength of the adviser-client relationship is the most important aspect looking to build a high level of trust and a life time partnership

Our clients are fully embedded into the culture of the firm, and have been with us over a number of years

A common thread is that all our clients have or are building wealth and look to us to help deliver on their goals

Client segmentation / profile

Delivering solutions

Once we understand our clients needs, then we look to deliver solutions

The key to deliver the return is in our approach and commitment to investing

We offer six risk rated portfolios which act as the foundation for many clients but we also bespoke investments depending on specific goals and needs

Delivering solutions

We are passionate about investing, and take a lot of our learning from the greats – Buffett, Lynch, Grantham et al

We believe investing is about long-term goals, and not about short term (often panic) thinking

Ultimately we attempt to be value investors*. If we like an investment then unless there is a fundamental change - why would you replace it?

*Value investors look to invest in undervalued stocks of companies. The horizon for holding tends to be long term and contrary to the market at a given point in time. We do this by looking for fund managers that share similar thoughts.

Delivering solutions – investment philosophy

Our portfolios tend to be made up from investment trusts and funds

We use the platform* as a means of driving down costs

We don’t look for this years winner based on last years success, performance is part of the process but understanding elements like fund manager process, succession planning etc is as important if not more so

We tend to adhere to the analysis of the judge at the famous obscenity trial in the 1960’s who after days of argument about what was or was not obscene said “I don’t know how to define it but I know it when I see it”

*A platform is sometimes called a wrap platform or fund supermarket. In reality it is purely an administration tool which is used to invest money and deliver goals.


The main influence for the portfolio structure comes from David Svenson and his book “unconventional success”

We avoid making big bets on sectors or markets as we believe over time and with constant rebalancing (selling back risen investments to buy the fallen) this will systematically achieve the desired results

We gather analytical data to make decisions but we find greater understanding comes from meeting the fund manager. Only by meeting and listening can you really get a feel for the investment

As a company we do favour emerging markets both in terms of debt and equity holdings. We believe long term this is where growth will be delivered


Once we have our pool of investments we then blend this into the portfolios, we cannot look into a crystal ball and predict the future outcome but we can, through back testing, get a feel for what they might produce so we blend funds so they match the portfolio objective

Joel Greenblatt when he published the “Little book that beats the market” was asked why he was exposing the strategy that had made him a fortune – he answered that the strategy required patience and persistence so few would actually follow it

Fundamentally our process is about searching out good managers, with good logic and reason, and good companies that have the support mechanism that ensures that the fund is not dominated by a “star manager” – our strategy requires patience and persistence and looks for long term returns


LWM Defensive Growth

The portfolio looks to deliver above inflation returns (through capital growth) whilst taking a level of risk consistent with a defensive risk attitude through a combination of fixed interest, equity and property investments.

Key points

The portfolio is positioned to be defensive compared to our other portfolios and currently holds approximately 40% in equities with the balance in assets such as fixed interest investments, absolute return funds and property. We believe this is the best way to provide potential upside growth as well as protection against downside fluctuations

If investors are looking for a cash investment then unlike a high street deposit account there is potential for capital loss and there is no guarantee that the original investment will be returned. In summary the portfolio is not aimed at cash investors

Although we aim to provide a positive outcome, past performance is no guide to future performance and investments can fall as well as rise

Delivering solutions – summary of portfolios

LWM Cautious Income The portfolio looks to deliver above inflation returns (through income and capital growth) whilst taking a level of risk consistent with a cautious risk attitude through a combination of fixed interest, equity and property investments.

Key points

The portfolio is positioned to be cautious compared to our other portfolios and currently holds approximately 40% in equities with the balance in assets such as fixed interest investments, absolute return funds and property. We believe this is the best way to provide potential upside growth as well as protection against downside fluctuations

The weighting in equities is lower than the cautious growth portfolio to reflect the need for income, income is normally provided through encashment of units rather than yields provided by the underlying funds




LWM Cautious Growth

The portfolio looks to deliver above inflation returns (through capital growth) whilst taking a level of risk consistent with a cautious risk attitude through a combination of fixed interest, equity and property investments. Key points

The portfolio is positioned to be cautious compared to our other portfolios and currently holds approximately 50% in equities with the balance in assets such as fixed interest investments, absolute return funds and property. We believe this is the best way to provide potential upside growth as well as protection against downside fluctuations

The weighting in equities is higher than the cautious income portfolio to reflect the fact that there is no need for income If investors are looking for a cash investment then unlike a high street deposit account there is potential for capital loss and

there is no guarantee that the original investment will be returned. In summary the portfolio is not aimed at cash investors Although we aim to provide a positive outcome, past performance is no guide to future performance and investments can fall

as well as rise


LWM Balanced Growth The portfolio looks to deliver above inflation return whilst taking a level of risk consistent with a balanced risk attitude through a combination of fixed interest, equity and property investments. Key point

The portfolio is positioned to be balanced, which reflects a desire for higher returns but still providing a balance between risk and reward. This means it holds a higher content of equities compared to the cautious and defensive portfolios, but less than the adventurous portfolios. Currently the equity holding is just over 64% with the balance in assets such as fixed interest investments, absolute return funds and property. We believe this is the best way to provide potential upside growth as well as providing a balance between risk and reward




LWM Moderately Adventurous Growth

The portfolio looks to deliver above inflation return whilst taking a level of risk consistent with a moderately adventurous growth risk attitude through a combination of fixed interest, equity and property investments, but with a higher weighting to equities.

Key point The portfolio is positioned to be moderately adventurous, which reflects a desire for higher returns and at the same time an

acceptance of higher levels of risk. This means there is a high level of equity exposure compared to the defensive, cautious and balanced portfolios. Currently the equity holding is just over 75% with the balance in assets such as fixed interest investments, absolute return funds and property. We believe this is the best way to provide potential upside growth with a higher level of risk, however there is less protection against downside risk




LWM Adventurous Growth The portfolio looks to deliver above inflation return whilst taking a level of risk consistent with an adventurous growth risk attitude through a combination of fixed interest, equity and property investments, but with a higher weighting to equities. Key point The portfolio is positioned to be adventurous, which reflects a desire for higher returns and at the same time an acceptance

of much higher levels of risk. This means there is a high level of equity exposure compared to all the other portfolios we offer. Currently the equity holding is just over 80%. We believe this is the best way to provide potential upside growth with a much higher level of risk, however there is less protection against downside risk




Adviser charging - fee structure

Fee structure

We have adopted a transparent fee structure for a number years

The fee is a flat percentage of the funds invested which covers the service proposition outlined in this document

The adviser charging structure is:

Our clients have this fee taken from their investments each year

Investments only Investments and / or pensionsOn-going service and maintenance

A flat fixed percentage adviser charge of up to 0.75% p.a.

A flat fixed percentage adviser charge of up to 1.00% p.a.

New business A flat fixed percentage adviser charge of up to 1.00%

A flat fixed percentage adviser charge of up to 1.00%

Fee structure

Charges in action

Client with £250,000 in investments invested in the LWM Adventurous Portfolio:

Currently an equivalent portfolio an execution only platform could cost around 1.5% p.a. or £3,750 p.a. in monetary terms. So the additional cost of advice is around 0.18% p.a. (or £450 p.a.).

Percentage Fee Percentage Fee As Monetary Amount

LWM Adviser Charge 0.75% £1,875Investment Platform Charge 0.40% £1,000Portfolio Fund Charge 0.53% £1,325 1.68% p.a. £4,200 p.a.

The future

Many businesses don’t discuss the future

LWM believe this is a life time partnership, succession planning is a crucial part to this

None of the key members of LWM are looking to retire and perhaps we will work into our eighties or nineties but our clients need to know what our plans are

We have in place two individuals - one who has recently completed their exams to be a certified financial planner*, and another who is just starting

These individuals are very much part of the day to day running of the business so clients get to know them, and if one of the key members of the team retired then clients would pass to these individuals

The aim is that like wealth will be passed down family generations so the business will be consistent whatever the changes in the make up of the team

*A financial planner is a practising professional who prepares financial planning for people covering various aspects of personal finance

The future

Helping others

A proportion of the profits of the company will go to help others both in the UK and overseas

The LWM Charitable Trust’s main aims will be: To fund well managed projects which help to relieve poverty, To support disadvantaged children; To make a positive difference to people’s lives.

The LWM Charitable Trust will look to go beyond supporting charities financially to helping practically to gain a greater understanding of needs and provide long term support

Helping others

Contact the team

We aim to issue email updates to clients at least twice a month

Clients can follow us on twitter, slide share, Facebook and via our website: @LWM_Consultants www.slideshare.net/InvestorsinValues www.facebook.com/InvestorsinValues www.lwmconsultants.com

To contact the office call 0117 370 2490, fax 0117 973 2770 or email [email protected]

Contact the team

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http://www.lwmconsultants.com/

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Summary

LWM are driven by a passion and desire to deliver a service proposition where the client is central to the business

We believe in long term, life time financial planning where we can help the client and their family

We are passionate about identifying goals first and then building the solutions to deliver the goals

We see investments as a central part of this proposition, and believe in long term investments and not being distracted by the noise around us

We believe that we can use what we have to help others

Summary

You should note that past performance is not a reliable indicator of future returns and the value of your investments can fall as well as

rise. PLEASE NOTE YOUR CAPITAL AND / OR RETURNS ARE NOT

PROTECTED OR GUARANTEED

LWM Consultants Ltd is an appointed representative of Sense Network Limited, which is authorised and regulated by the Financial Services Authority. Registered in England and Wales under Company Number 07408315. Registered Office: The Garden Suite, 23 Westfield

Park, Redland, Bristol, BS6 6LT

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LWM Consultants - Investors in values