Fair Value Statement

Introduction

This document is aimed at providing you with a brief overview of our firm and to introduce our services.

In this document, we intend to illustrate how we assess value and whether there is fair value between the total price of the service and the benefits and their quality that our clients receive.

Simpsons Wealth Management are based in Eastbourne and have been established since 1990 providing financial planning guidance for high net worth clients.

Our service proposition has been designed to meet the needs and objectives of our clients and to ensure fair value is received by engaging with our service.

Our services are typically suited to clients with the following profile:

  • Net worth between £250K and £5 Million
  • Clients seeking income or capital or a combination of the two
  • Long term investors prepared to invest for longer than 5 years
  • Pre-retired, at retirement and retired
  • Prepared to pay for ongoing advice
  • Understand the financial planning and investment process

Our portfolios aim to deliver returns in excess of inflation within the range of RPI minus 1% to RPI plus 4% over a period of 10 years or longer by investing in a mix of Equities and Bonds globally. By diversifying, keeping costs low and adopting a patient, disciplined and evidence based approach we aim to avoid the behavioural mistakes that often damage returns. Our strategies provide clients with robust financial plans to provide stability and peace of mind for the future.  The value of pensions and investments and the income they produce can potentially fall as well as rise and you may get back less than you invested.

The Value of our Service

Simpsons are a member of the Best Practice network which provides an institutional regulatory supervision and compliance framework service which supports us with a high level of regulatory assurance and leading-edge client management systems. This high quality and financially sound organisation ultimately provide us with a high level of assurance and comfort around the regulatory framework of the proposition and services we deliver to our clients. By leveraging the quality and services of an organisation like Benchmark, a Schroders plc group company, we have comfort that we will remain at the leading edge of our profession, ensuring we maintain a “Best Practice” approach to serving our clients. Many of the benefits we derive, we see as adding value for our clients, including:

  • Integrated client technology systems, including the Wealth Platform.
  • Independent compliance supervision of our advisers and the suitability of our client advice.
  • The provision of an independent complaints handling process for all of our clients.
  • Enhanced professional indemnity insurance.

Initial Advice

A vital first step of the financial planning journey is initial introduction of clients to Simpsons. Our initial advice process will include the following:

  • Discovery Meeting
  • Full get to know you meeting
  • Establish your goals and objectives / needs and wants
  • Establish your priorities
  • Establish your attitude to risk and capacity for loss
  • Analysis of existing planning
  • Research of potential solutions
  • Construct a holistic financial plan
  • Meet to discuss the financial plan and recommendations
  • Agree implementation

The purpose of our initial advice process is to explain the necessary regulatory disclosures to our clients and to provide a full explanation of our services, how Simpsons work, our professionalism and our service proposition and fees.

The Annual Review Service

For us and our clients, this is an integral part of the financial planning journey. This gives us an opportunity to sit down with our clients and their families, to reflect on the past year and to look forward and consider what might be on the horizon for them in the coming years. To provide reassurance and peace of mind about how their investments are tracking against their goals and to review their plans in the context of any changing circumstances in their lives, new goals, or changes in objectives. In particular we will consider the following:

  • The outlook for markets and the economic landscape and changing tax regulations which might impact on their current plans. We make sure everything we are doing remains suitable and is aimed at helping our clients and their families achieve their goals.
  • An opportunity to think about the coming years, plans for the family, begin to consider key life stages and events and how we might need to adapt our plans for them.
  • Ensures our clients’ current positions are still appropriate for them.

Our service includes arranging ISAs every year as well as top ups to existing investments and pensions.

Cashflow Planning/Forecasting

Cashflow planning/forecasting is an important tool that will help our clients to gain greater clarity of their financial future and any action that may be required. In particular cashflow planning/forecasting will help to consider the following:

  • The cash flow forecasting provides a visual illustration of how a client’s investments and wealth will move over time in relation to the financial plans that we formulate to meet their goals. This gives clients considerable comfort knowing that there is some mathematical rigour to our advice and how it will help them to meet their goals.
  • Cash flow planning allows us to scenario test our clients plans against historical market events and simulate how our clients’ goals could be impacted by these types of events. It allows us to show how risk events might impact portfolios. It is a really great way to help clients understand more about investment risks and how this translates to their plans. This helps our clients to feel more informed and comfortable about their financial planning.

Family Protection Planning

It may be an uncomfortable subject but we all need to plan for the unforeseen in life and how this would impact our clients and their families. We can help them to consider different scenarios which could occur and identify if there are any shortfalls in their protection planning. We can explain what options clients have to address these shortfalls and how they would ensure they are able to maintain their lifestyle and still meet their longer-term financial goals, in the event of ill health or death.

We have access to professional tools and paraplanning resources/staff to conduct analysis and research to find the most suitable product. We also consider the use of trusts to provide ease of access and control for the plan benefits.

IHT and Estate Planning

We work with our clients and their professional advisers who have a deep knowledge and understanding of HMRC tax rules in relation to clients and their estate’s assets. We can help our clients to understand the value of future liabilities and design and implement strategies to reduce this burden, often saving clients thousands of pounds in potential tax charges. This provides real value and peace of mind to our clients that their families will be looked after when they are gone.

Retirement Planning

This is an area of planning which deserves significant time in reviewing for our clients each year. Often in the background, checking on progress of plans and investments clients have made to fund their life in retirement. Our research incorporates adapting to market swings and modelling various impact scenarios. Retirement planning is one of the most valuable services we provide our clients.

More than 50% of our clients are currently in retirement, following our advice and drawing on their assets to live a stress-free life in retirement. Our retirement planning takes the worry away from our clients.

Long Term Care

Long Term Care can be a complex, emotional and difficult topic. Whether clients are thinking about themselves or exploring options on behalf of a loved one, we will simplify and explain all the options available and how best to plan for them.

Tax Efficiency

We make sure to consider tax reliefs and allowances, enabling clients to maximise their after-tax wealth. If they do not take advantage of annual tax reliefs, then clients could quite literally be paying more tax than is needed. We can evidence the amount our clients have potentially saved through our planning.

Market and Product Research and Analysis

We will recommend the most suitable solutions for our clients, we use professional tools to conduct research and analysis of provider and product solutions. This ensures we can make recommendations to best meet our clients’ needs and goals.

Advice for Entrepreneurial Families

We provide the following services to our Entrepreneurial Families:

  • Business advice – key man insurance / shareholder protection planning – these arrangements can ensure the survival of the business and compensation for the family of the business owner in the event of a tragedy.
  • Relevant life cover can be arranged for Directors which will allow the company to establish protection arrangements which are tax efficient and the savings which can be illustrated in £’s and pence can be significant.
  • Referrals to professional services firms which can leverage years of experience, particularly with solicitors and accountants. This saves our clients the time and energy required to develop these connections for themselves.

Investment Philosophy

One of the biggest challenges that all investors face is deciding what to invest in and what to avoid. At Simpsons we have conducted extensive research into the various approaches investing may take and our findings have led us to adopt an “evidence-based” philosophy.

An evidence-based approach is founded on the belief that markets are hard to beat consistently. Beating markets involves trying to pick the best stocks and correctly time market trades to exploit potential opportunities. This adds an additional layer of risk for which investors may not be adequately compensated. Very often, these approaches do not stand up to scrutiny. They can also necessitate higher costs, to pay for the supposed “expertise” of those making the critical investment decisions.

Evidence-based investing is an approach grounded in empirical research and the long-term observation of markets and how they work. Using this research, investment portfolios can be designed which base their success on the application of a few key factors: portfolio structure, controlling costs and managing risk.

The use of our recommended portfolios will give access to a broad range of funds across a number of financial and geographical sectors, which provides diversification in line with the agreed risk level, at the same time structuring the investment portfolio. This diversification potentially reduces the impact of negative performance of a particular asset class or market.

By using our portfolios we are able to manage the investment objectives, performance and asset allocation more closely and can ensure that the integrity of the investment strategy is maintained during the term.

Once an investment portfolio is in place, it is important to monitor the progress of the portfolio and to “rebalance” the investment funds back to the agreed allocations when necessary. This will ensure the portfolio remains on track to deliver its intended goals. Other than rebalancing, trading should be kept to a minimum, to minimise costs.

Overall, adopting an evidence-based approach helps to focus the principles of investment success on the fundamentals and, we believe, results in the best outcomes for our clients.

ESG, or ethical, considerations have become increasingly important in investment markets in recent years. However, these terms convey different meanings to different people, which translates into differing expectations for what impact clients wish to see on their investments from the application of these factors.

In constructing a suite of ESG portfolios for our clients, Simpsons has had to balance the various ESG considerations with our investment philosophy. The objective has been to provide a series of ESG portfolios that is sufficiently distinguished from our “standard” offering, whilst retaining the integrity of our investment philosophy as far as possible. This is because we want to ensure clients who adopt a more socially responsible approach to investing do not do so at the expense of real returns and diversification.

Simpsons has partnered with a discretionary investment manager called Timeline, in order to enhance our investment proposition for our clients.

Summary

When considering the service we offer to our clients, it is not just about monetary goals. Our holistic approach towards planning for our clients is also about life and family and the next generation. This enables us to help clients to think about things they may not have considered and how plans can work together to create a cohesive timeline of advice.

Considering all areas included in the assessment of value, we believe the service provided is demonstrating value overall and our service proposition along with this value statement has been approved by our network, Best Practice IFA Group Limited.

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