Investment Philosophy
LifeTime Financial Group's investment philosophy is built on transparency, tailored solutions, disciplined management, and competitive costs. Managing client wealth is both a privilege and a significant responsibility. This approach guides every decision, from portfolio construction to ongoing management.
A core element of our approach is our emphasis on the cost-benefit relationship of portfolio construction. By using exchange-traded funds and actively managing portfolios only as or when required, we consistently deliver similar or better returns than comparable managed funds, but at a significantly lower cost. Although brokerage applies to these transactions, and while we receive remuneration from these transactions, the total ongoing costs for most clients are still significantly less than comparable portfolios. We manage the inherent conflict through transparency and disciplined management. Our commitment to these principles means you will clearly understand what you are paying for the actual costs of the transactions and the tangible benefits you receive. Based on our modelling and research, this approach works and delivers sustained and significant benefits. Still, if you are uncomfortable with our philosophy or approach, we can refer you to advisers who might better suit your preferences.
Risk Profiling and Management
Understanding and managing risk is central to our investment approach:
- We assess your risk appetite and risk tolerance alongside investment timelines and broader economic indicators.
- Our process aims to manage volatility by strategically allocating assets, aligning with your personal growth objectives, investment preferences and risk comfort levels.
- Emotions such as optimism and fear can significantly influence markets. Our disciplined approach helps avoid reactionary decisions driven by short-term market fluctuations.
Portfolio Construction
Our portfolio construction process involves the following:
- Comprehensive research and analysis with our internal Investment Committee and external Investment Consultants.
- To build robust, balanced portfolios, income potential, market trends, economic forecasts, and tax efficiency are considered.
- Quarterly reviews to ensure your investments remain aligned with evolving market conditions.
Exchange Traded Funds (ETFs)
ETFs form the foundation of our portfolios due to their cost efficiency, diversification, and transparent investment strategies:
- Broad Diversification: ETFs help mitigate risk and smooth portfolio volatility.
- Strategic Allocation: We apply a top-down approach, focusing on macroeconomic trends to simplify portfolios and reduce unnecessary complexity.
- Transparency and Clarity: We carefully select ETFs that reflect their stated strategies, avoiding misleading fund labels.
Where appropriate, ETFs are complemented by select individual stocks or securities to enhance returns and further diversify your investment profile.
Why We Use Brokerage
LifeTime Financial Group deliberately opts for brokerage-based portfolio management rather than relying on Separately Managed Accounts (SMA) or Managed Discretionary Accounts (MDA). Several critical considerations inform our decision:
- Fee Transparency: SMA and MDA services incur annual fees ranging from 0.50% to 0.80%, paid directly to Responsible Managers. For many clients, this cost may not align with their best interests.
- Portfolio Adjustments: Unlike SMA or MDA structures, our tailored portfolios always consider your specific financial circumstances, including tax implications, before making adjustments.
- Tax Efficiency: We prioritise your tax circumstances when managing portfolio adjustments, something SMA and MDA platforms typically overlook.
- Avoiding Market Timing Pitfalls: SMA and MDA platforms allow instant asset liquidation, but this approach rarely delivers sustained long-term value.
After careful comparison and analysis, we found no clear advantage in SMA or MDA services. Instead, our brokerage approach provides greater transparency, flexibility, and alignment with client-specific objectives.
