VALUES STATEMENT

Over the years people have approached us for many and varied reasons, and in some cases have been surprised at the scope of financial planning to add value in their lives.

This information is our attempt to help you decide whether our philosophy and services are appropriate for your needs.

 

You are more than welcome to contact our office at any time to seek clarification on any financial matter. We look forward to being of value to you.

 

Financial Planning

 

We believe successful planning is a two way street. Whilst we take responsibility for our recommendations, we must also help you to gain an understanding, confidence and acceptance of any strategies that we may recommend.

 

This means even busy clients must give their own affairs time and priority. We seek to inform and guide you but your own engagement is a vital ingredient to a successful partnership.

 

The outcome is soundly based decisions, ownership of those decisions and responsibility and motivation to achieve your agreed goals.

 

Important Issues

 

We would like to ensure that if you become a client of MK Financial Planning Services, you are fully aware of the following points:

 

  • We are financial planners, not investment advisers. We do not promote the latest gimmick or “hot stock” or tax effective scheme. Rather, we agree upon long-term strategies and build your portfolio accordingly.

 

  • You should accept that investments can fall in value, sometimes quite sharply. We cannot, and do not attempt to “pick” those times.

 

  • Sustainable wealth is accumulated slowly in most cases. Your investment plans are as important as investment returns, and this obviously requires on-going discipline and discussion.

 

  • Experience tells us everyone tends to be risk takers when investment values are rising and are often risk averse when markets fall. Our role is to ensure our clients do not become too greedy in good times or too timid in bad times.

 

  • Our services must be fairly compensated, whether by fee or commission and clients need to be aware of and in agreement with our level of remuneration. This is always discussed and agreed upon early in the relationship.

 

  • We believe you should always feel that you can ask questions if you do not understand or agree with , whether it relates to a financial strategy, investment returns or fees.

 

Investment Philosophy

 

The Financial Planning industry is constantly evolving, and it would be fair to say that there is a wide variance in the types of services offered. You must therefore be comfortable that our philosophy suits your own needs – if not, other practices may be more appropriate.

 

So what are our key Investment beliefs?

 

Investors versus Speculators

We are Investors, not Speculators. We strongly believe in building your wealth over time, using personalised strategies and a disciplined approach. In our opinion, speculation on “hot tips” involves luck rather skill.

 

Timeframe and Risk Profile

We invest according to your timeframe, and your Risk Profile. We cannot predict short-term market movements. We are unable to tell you it is time to “get out of certain asset classes”. We believe in “Time in the market – not trying to time the market”.

 

Therefore we personalise a strategy for each investor and invest in long-term funds only when you are completely clear about your objectives and satisfied that short-term risk is not an issue.

 

Diversification

We believe that diversification is important to building your wealth. While it may limit your potential upside at certain times, it will also assist preserve your capital in down markets. It ensures ambition for high returns does not overpower common-sense and prudence.

We believe it is imperative to not only diversify across different asset classes, but also across different markets, regions, and many different management styles.

 

Taxation

Whilst we are tax aware, we do not invest for tax purposes alone. Many tax driven schemes are expensive and overly ambitious. Why save tax but then lose capital? Potential clients seeking access to mass-marketed tax effective schemes could do better seeking alternative advisers.

 

Australian Shares

Australian Shares can offer sound long-term value in the form of Capital Growth, income (dividends), and tax benefits through the dividend imputation system.

 

International Shares

We consider it vital that you have exposure to a range of businesses available across the globe by investing in International Shares (some industries do not exist in Australia). This can reward investors with a long term view, as well as diversifying your investments.

 

Fund Managers versus Direct Shares

We believe that most busy clients are better served by managed funds rather than direct share ownership. We are licensed to provide advice on shares (we are not brokers), but it is an area that requires a lot of commitment, interest and discipline on your part.

 

We regularly use a range of specialised fund managers (sometimes more than 30 specialised managers within a portfolio) that have highly trained professionals monitoring companies every day – within Australia, and all over the world.

 

Borrowing to Invest

While we acknowledge that borrowing to invest can enhance your returns, we also know it can magnify loses, so any debt strategy should be approached with the necessary caution.

 

Property Investment

We support a range of wealth accumulation strategies, and Property is included in this.

Good quality assets whether it is Property or Shares, will assist with building wealth over time. We do not routinely sell assets unless both you and we agree that the sale actively contributes or enhances your longer-term financial goals.

 

Hedge Funds

While hedging is a legitimate business financial tool, and an important one, however, we have reservations about the ability of hedge funds to consistently add value to your investments. We therefore only have small exposures to this strategy within diversified funds.