One of the most important steps is to establish a mission and strategy statement for the wealth. For example:
- What is the client looking to accomplish both in the near term and the longer term?
- What are the qualitative and quantitative objectives the client would like to prioritise?
- What does the client see as the purpose of their wealth?
Creating a mission and strategy statement to act as a baseline for all decision making ensures that everyone – both clients and their service providers – are working in tandem to fulfil the enterprise’s ultimate objectives.
Purpose Of Wealth: Protect, Enhance Or Enjoy The Wealth
We think the purpose of wealth can often be distilled into three objectives – protect capital (stay rich), grow capital (get richer) and enjoy capital. Most clients tend to want a combination of these, but in differing proportions. How assets are managed will reflect the goal or goals of the client.
- All three are important for most clients, but in different proportions
- We categorise all assets in portfolios according to how they serve these goals
- Making sure this is agreed and understood with you ensures the path we set out on is not deviated from at the worst possible time, thus avoiding permanent capital destruction.
- A longer term view facilitates an emotional detachment and creates the intellectual space needed to make better decisions
- We believe that the real measure of success of a portfolio strategy is whether it meets your goals, which are more likely linked to beating inflation rather than performance relative to an arbitrary financial market based benchmark