Our investment approach
Ethos
At Lab we stick to our knitting. We're highly-qualified and experienced financial planners, but we are not investment managers.
Managing money in an investment portfolio is a very different discipline to helping people plan their financial future.
Because of this, we don't run investment portfolios in-house. Instead, we select our investment manager partners from across the whole of the market, using a thorough research and due diligence process. We do this with the knowledge of what our clients need and their investment preferences.
We keep the performance of the portfolios and the portfolio managers under constant review and will tell you exactly how they are doing.
If we believe there is a better option in future, we'll tell you and recommend you change. This is the benefit of us being independent and having no ties to any investment managers.
Risk
It all starts with understanding how much risk you need to take with your money.
Through the use of an easy-to-complete questionnaire, we will understand how much risk you feel comfortable taking with your money.
Once we know this, it is our job at Lab to assess how much risk you can afford to take, and how much risk you need to take, to get to where you want to be in the future, and do the things you want to do. This is all ties in to your wider financial planning picture.
We don't want you taking more risk than you need to, but neither do we want to limit the returns you could potentially get. Think of it like goldilocks and getting the mix just right.
And remember as always, the value of your investment can go down as well as up, and you could get back less than you invest.
Preferences
Once we know the right amount of risk for you to take, we'll discuss any investment preferences you have.
This all relates to whether you want to avoid or limit investments in certain areas. When people choose to do this, it will typically be things like tobacco, fossil fuels, armaments or oppressive regimes.
Some people want their money to have a positive impact on the world, and want it to be used to try to seek solutions to the world's problems; be it climate issues, or helping the developing world, whilst also trying to benefit themselves by growing their money.
Or, as can be the case for lots of people, they have no preferences and are simply happy to try and grow it with no restrictions placed on where the money can be invested.
Whichever camp you fall into, we have a solution available that fits your needs and takes a suitable amount of risk, to try and get your money to work just as hard for you, as you've worked to get it in the first place.
Evidence-Based Portfolios
When it comes to investing in conventional portfolios (those with no ethical considerations), we typically recommend our clients use evidence-based investment portfolios.
This simply means building a well-diversified (think not putting all your eggs in one basket) portfolio of investments, based on decades of research and historical data. We think it is not about trying to 'beat the market'. If you can achieve market returns and keep costs as low as possible, history shows this should provide the return you need.
What it is:
Incredibly well diversified across the world
Invested in a variety of companies in all shapes and sizes
Invested in government and company bonds
Trying to capture market returns
Low cost
What it is not:
Trying to time the market
Investing in a narrow range of investments
Actively trying to beat the market
Invested in things that are difficult or slow to trade
High cost
An ethical investment option
Impact Portfolios
Investing with any kind of ethical/green/sustainable/impact preferences comes with additional considerations over and above conventional investments.
Not only are you trying to grow your money, but you also want your preferences to be incorporated.
To able to align your money with your values is fantastic, but it does come at an extra cost.
This is because the managers of these portfolios have to do additional research into whether the investments they could potentially hold in the portfolio align with the ethical criteria.
In addition, they have to report to investors, to outline how ethical or impactful the portfolio is being.
Because of this, we do not believe that you can invest with any kind of ethical or impact and it truly avoid things you want to avoid, without investing through active investment managers.
There is not one investment portfolio we offer to our clients who want to invest this way. There are a number of different options, and which one is right for you will become apparent once we've discussed your investment preferences in detail.
Once we know this, we can explain how the investment portfolio works: what it will do, what it will not do and what you can expect.
