At Chesterton House our mission has developed from simply being great financial advisers. We've come to recognise that competence with money doesn't automatically equate to having a great life. We believe that the way you handle your money is a metaphor for the way that you handle your life, and generating ever increasing amounts of money is of no personal value unless you have peace of mind about what your money means to you. Considering how to achieve this peace of mind inevitably takes us into deeper areas, and as a result our mission statement has developed into; "Helping people to achieve financial, emotional and spiritual freedom."
By this, we mean that we seek to help our clients to achieve mastery over money, combined with true peace of mind so that they are inspired to follow their own personal passion, creativity and individuality - their spirit.Does this sound as good to you as it does to us? Contact us today to arrange an initial telephone conversation with Andy, Richard or Lisa.
Values-Based Financial Planning
When your efforts to prosper reflect who you are and what you’re meant to do in life, you increasingly experience the natural sense of energy and calm that result from acting in harmony with your values. We use your Financial Road Map to help you to express and record those values as the springboard for the future work we do together.
To be able to advise you correctly and consistently we need to be clear about our philosophies and beliefs when giving advice. All staff of Chesterton House are involved in the development of our philosophy, and share in a commitment to putting it into practice.
- We are Financial Planners. Planning means having a clear objective in view, and then devising a strategy to achieve it in the most efficient and effective manner possible. Our sole concern is with assisting our clients in meeting their life goals through the proper management of their financial resources. Our success is not measured by performance statistics, but rather by our clients' success in achieving their goals.
- We believe that our clients must set their own goals. Our role is to educate them in the process and to help them to define, quantify and prioritise their goals. It is also our responsibility to assist them to recognize that there may be 'hidden goals' (e.g., risk management issues) that may take priority over investment issues.
- Our whole approach is process driven. This means that there are a series of pre-determined steps to follow in order to arrive at a solution that is appropriate to each client’s own individual circumstances. The planning process requires the full participation and commitment of the client for whom it has been created, and must be at least as important to him or her as it is to us. We will not be able to work with clients who do not give adequate attention to the financial planning process.
- Our approach is holistic, that is, we are concerned with our clients’ affairs “in the round” rather than concentrating on a limited number of issues only. This requires that we have full knowledge of our clients’ circumstances if we are to give advice that is effective in best meeting their objectives.
There are a number of beliefs and philosophies that underpin the process that we follow and the advice that we give. These philosophies have been established over a long period of time as a result of using sound financial planning principles, observation and experience.
- We are long term investors. We do not make investment recommendations on the basis of short term market plays, but in a belief that the greatest rewards for investors are achieved by taking a long term view and being prepared to ride through market price changes.
- We will not recommend investing in asset based media (e.g., shares, property) where there is a likelihood that any part of the money invested will be required within the next five years. The five year view is a rolling view, and it is essential for clients to understand that they should not commit money to asset investments unless they can take this long term approach.
- We believe that asset allocation is more important than individual investment selection. A properly constructed investment portfolio will contain elements invested in different types of holdings, and it is the balance of these and their relevance to achieving the client’s objectives, that is the most important and influential part of the financial planning process.
- We believe that market timing doesn’t work. Over the years we have found that attempting to make short term judgements about likely future price movements is not an effective basis for investing. In other words, it is a more risky strategy in the long run to not invest in a particular asset than to invest. If a client accepts the desirability of placing money into certain assets, that decision should be implemented without delay, other than in extreme market conditions.
- We believe in the 80/20 rule (the Pareto principle) which states that 80% of outputs arise from 20% of inputs. This can be applied to portfolio investment by stating that, as a generalisation, 80% of investment returns will be gained from 20% of the assets owned. The route to exceptional returns is therefore to restrict investment to this 20% of assets. Unfortunately it is also true that 80% of the risk in a portfolio will arise from 20% of the assets, but neither the best performers or the most risky assets can be identified in advance. We therefore believe in diversification of assets as a means of controlling risk, even though this may dilute investment performance. The effect of this approach is to make portfolio returns more predictable and therefore make it more likely that the client’s objectives will be achieved.
- We believe that portfolios should be structured to achieve total return, not dividends or interest. The concept of an 'income' portfolio places unnecessary and inappropriate restrictions on portfolio design. Plans structured to match dividends and interest with cash flow, in the long run, are likely to fail to meet the client's inflation adjusted cash flow needs.
- Having created a portfolio, it is essential to review and rebalance the asset allocation periodically. This requires analysis of performance, firstly of the portfolio as a whole and its success in meeting client objectives, secondly to realign with the original (or revised) asset allocation model, and thirdly to verify the performance of individual portfolio components.