The value of investments can fall as well as rise. You may not get back what you invest.

Independence Assured investment philosophy

There are various investment philosophies, i.e. Active Management, Passive Management, Blended Management etc. Active investment management relies on research, market forecasts and the individual investment managers’ own judgement and experience in selecting securities to buy and sell holdings, believing that they can outperform the market at a greater rate than the additional expenses of using their services. Passive investment management assumes that the markets are efficient in that everyone has access to information therefore individual stock picking adds more cost than value. Therefore, it is better to track the market at reduced costs. We recognise that both active and passive approaches to investment fund management have their place. Active management, whilst more expensive, can add value because of the opportunities it can seize. Whilst also appreciating that a passive approach gives our clients access to diverse markets at a competitive price, we believe at Independence Assured, that by adopting a blend of both strategies, given the appropriate risk profile, that this gives our clients the best of both Worlds.

Most appropriate tax wrapper

We believe that the agreed investment strategy should not be constrained, where possible, by the tax wrapper. Selecting the most appropriate tax wrapper is important to ensure the returns on client’s investments are not eroded unduly by tax and charges.

Asset allocation

Opinions have grown from previous studies that approximately 90% of investment performance is derived from asset allocation decisions, not market timing or stock selection.


To reduce volatility and concentration in one market, spreading exposure across different asset classes. This includes countries, currencies, industries, types of stock and commodities. It is very important to ensure diversification.

Researching funds and 3rd party expertise

Whilst we have years of investment experience, with a possible 30,000+ funds to choose from, along with market trends and cycles, having a robust method of selecting and reviewing investment funds is essential. We therefore consult with and refer to, a number of leading specialist investment research and analysis organisations.

Re-balancing – The value of keeping your portfolio in shape

As different stocks, asset classes and geographical regions etc. will perform differently at different times, this means the investment spread can fall out of balance with the weightings required to maintain the target asset allocation in line with a clients risk tolerances. It is important for your investment funds to be reviewed and rebalanced regularly to ensure that the funds included are weighted correctly to keep the overall risk profile of your portfolio in line with your attitude to risk. This also helps lock in gains made (selling stocks that have done well) and reinvest in those that may be underpriced and have their time to come.

First Stage – Asset Allocation

To assess a clients attitude to risk towards investment we employ an attitude to risk questionnaire called a “Dynamic Planner” prepared by Distribution Technology which is a risk profiling software tool which requires a deep understanding of technology, customer psychometrics as well as investment and financial planning.

Distribution Technology where established in 2003 and have won many awards including “leading platform-based planning tool provider at the 2012 Aberdeen Platform Awards”.
The Dynamic Planner questionnaire lists 15 carefully worded “How would you feel if?” type statements for which there are five possible answers. This psychometric testing approach cross references a clients views on a scale of 1-10 to achieve a mean average appraisal of what appetite of risk a client has to take towards his or her investment be it a Pension, ISA, Bond Unit Trust or OEIC etc.
Once complete, a profile of asset allocations will be established whereby the system will proportionately divide into sectors of investment as a percentage, such as Property, Bonds and Equities (both UK and International) weight these sectors according to the clients risk profile.

For example, based on a client with a risk score of “5” (low medium) on July 2018 may have a portfolio consisting of the following asset classes-


Fund Asset Sector % Split
Cash 5%
UK Corporate Bonds 21%
UK Gilts 5%
Global High Yield Bonds 4%
UK Equities 26%
Europe ex UK Equities 4%
North American Equities 12%
Japan Equities 6%
Asia Pacific ex Japan Equities 5%
Emerging Market Equities 5%
UK Commercial Property 7%


Second Stage – Fund Choice (Example of Strategic Planning, “Active approach” option)

To populate the above sectors with appropriate robust funds we use Capita “Synaptics Systems”. We will then apply set filters agreed by our investment committee, criteria is then set which picks funds with the attributes required. The requirement is to match closely as possible funds which have achieved the following benchmarks:



Alpha greater or equal to 0.1 The measure of a fund after adjusting for risk
The measure of an funds risk Beta lesser or equal 1.0
Performance Average Quartile Ranking less
Charges Total Expense Ratio (TER)
Open fund Is fund accessible
Track record Years of data greater or equal to 3 years


Once qualified the funds will be graded according to the Total Expense Ratio (lowest cost overall charge).


The aim of the investment committee is to provide cost effective portfolios which are constructed in a way that provide a high level of diversification using fund which from past experience have delivered performance above their respective benchmarks.

* Accurate March 2017 and subject to change

Contact us for further information.