“Starting a pension is one of the most important and far-reaching decisions of your financial life. It is absolutely crucial to get it right from the start. Best quality advice is essential – and that’s what you get from Principle First.”
Gareth Flanagan, Principle First Financial Advisers
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Pension Advice Process & Pension Research
The following process reflects our approach to carrying out personalised pension advice and how we selected funds for your pension.
Step 1 – Risk Analysis
Using our Risk Profiler, we determine your attitude to risk. You can do this online here and we have also put together our Recommended Portfolios for each risk profile to help with your investment choices. As pensions are more of a long-term investment, you generally can allow for more risk.
Step 2 – Asset Allocation
The key to ensuring clients receive the maximum potential growth with their pension is to ensure their money is invested in sectors that suit their risk profile. From your risk profile, we identify suitable asset classes to invest your money. The percentages of funds we allocate to different asset classes is also determined by your risk profile.
However advice is key at Principle First. From time to time we will avoid certain sectors due to overall poor performance or negative market conditions, as market conditions can change. To ensure clients receive up to date advice and better returns on their pensions and investments, we will avoid certain sectors if required.
Step 3 – Sector Selection
From your risk profile we identify suitable investment sectors. These sectors are assessed regularly by Principle First investment advisers.
Step 4 – Fund Selection
Once a suitable sector has been ascertained, we examine funds within that sector.
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Our Research & Fund Selection Criteria:
Each fund is analysed based on:
Volatility (risk)
Past Performance
Industry Ratings (see below for more detail)
Industry Ratings
The independent companies who issue the industry ratings are given access to information from the fund managers that wouldn’t normally be available for general viewing. In some cases the fund manager will not give access and as a result they are given no rating.
S&P Rating – assesses a company’s Claims-Paying Ability, i.e. its financial capacity to meet its insurance obligations. S&P forms its opinion by examining industry-specific risk, management factors, operating performance and capitalization.
MorningStar Rating – The MorningStar RatingTM is a quantitative assessment of a fund’s past performance – both return and risk – as a measurement from one to five stars. It uses focused comparison groups – MorningStar Categories – to better measure management skill. The rating is also adjusted for all sales charges and exit fees to reflect actual returns received by the investor.
Crown Rating – The Financial Express Crown Ratings are a quant-based ratings system designed to highlight funds that have had superior, consistent performance in relation to risk, relative to their peer groups, the fund sectors as defined by the IMA and the ABI. Crown Ratings are compiled using three key measurements of a funds performance – alpha, volatility and consistency.
Old Broad Street Research Limited (OBSR) – Research Approach & Methodology – uses an investment research approach that has been in place since 1994. The emphasis is on looking forwards, not backwards; and for this reason, we place a great deal of importance on the qualitative aspects of our research. Our conclusions are nonetheless informed by detailed statistical (quantitative) analysis. This means we are aware of past results rather than driven by them and we use the information to validate our qualitative research.
Many funds may have an element of high, medium or low risk investments held within them, however, overall their risk rating is reflected above. It may therefore be necessary when considering individual investments that reflect your attitude to risk, incorporating a small proportion of low, medium or high-risk funds.
Step 5 – Recommendations
Based on all the above we will recommend suitable funds for the future growth of your pension pot.
Step 6 – Ongoing Pension Management
We continually monitor the values of your pensions, and will make further fund recommendations if we feel it is necessary.
Additionally you will have 24 hour access to our client area, where you can monitor your pension’s values, compare them to industry averages, and produce charts and fact sheets to help you gauge their performance.
Click here now for Pensions Advice or call 0800 678 5929
