Financial Planning

What is lifestyle planning?

Lifestyle planning places the achievement of your aims, dreams and personal values before the deliberate pursuit of wealth creation. When it comes to planning, people can place far too much emphasis on investment performance, whilst neglecting the reasons why they are saving in the first place. Financial planning is not just about maximising your investment returns, it is about aligning your goals to your values, so you always know why and what you are investing for.

What are the benefits of lifestyle planning?

By focusing on what's most important to you, and with the support and guidance of a clearly defined road map, you will be well equipped to give you the best chance of bridging the gap between where you are today and where you want to be.

What is unique about Upstream?

There are three levels of financial planners. The first is focused on selling products, the second looks at finding a solution to a specific problem such as saving for your retirement, and the third, the lifestyle (values-based) planner, takes a holistic view of your financial and non-financial priorities.

If one of the first questions a financial planner asks you is how much money you’ve got to invest then take this as a warning signal as you could be dealing with a salesman because this is one of the last things we need to know when assessing your financial situation. This type of relationship is about meeting the needs of the adviser. It is a relationship based on taking.

Fortunately, financial planning has evolved from that to one where the financial planner will ask you what financial goals and objectives you have for the future. This is a problem-solution (transactional) type of relationship and is about meeting the needs of you as well as the needs of the adviser. It is a relationship based on give and take.

The approach that Upstream adopts, the third level, is about understanding your values and determining what’s important to you, before doing anything else. It is a relationship that is totally focused on meeting your needs. It is a relationship based on giving. By aligning your goals and dreams to your values, we can help protect you emotionally from the financial highs and lows that life will inevitably throw your way.

Who is a good fit for Upstream?

We understand there must be a good fit between us before we can build a long-lasting and trusted relationship. We prefer to work with serious professionals who are committed to creating a better life for themselves and their families. We are a good choice for individuals who recognise the value of a financial professional partnership that allows them to get on with enjoying life knowing their finances are in good hands.

Who is not a good fit?

Possessing the right attitude is crucial to achieving your goals. Experience has shown us that it can be problematic trying to nurture long-lasting relationships with people who care less about their own finances than we do. We can provide you with all the guidance, information, coaching and support you will ever need, but if you lack the motivation and discipline required to make the necessary changes in your life, you will struggle to stay the course in pursuing your long-term goals.

How do you charge for your services?

As a fee-based company, simplicity, transparency and trust are everything to us. You will never feel like you have been misled or caught out by opaque charging structures, or left disillusioned from hidden costs and sales commissions.

Before we commence work on your behalf, we will let you know exactly much you will be charged for our services and ongoing support. Our fees are two-fold. An initial fee for implementing your lifestyle and investment plan which is based on the following tiered fee schedule, and an annual advisory fee of 1% of total funds under advice, which is deducted quarterly in arrears from your investment.

Tier Step Amount Fee
1 First £175,000 3.0%
2 Next £325,000 2.5%
3 Next £250,000 2.0%
4 More than £750,000 1.5%
A fee of £1,250 (GBP) will apply for initial investment amounts of less than £40,000 (or $/€ equivalent)

Can I switch from my current adviser to Upstream?

Yes. In a recent study by Vanguard into reasons why clients left their advisers, it was discovered that a lack of communication topped the list, whereas portfolio performance came in near the bottom. Clients expect their financial advisers to listen to their needs and take proactive steps to keep in touch. If you have lost touch with your adviser and would like to benefit from our professional support, let us know and we will be happy to take care of the necessary arrangements for you.

Investment Planning

What is evidence-based investing?

Simply stated, to achieve the best outcome for you, evidence-based (passive) investing makes use of the best available evidence when designing and implementing your investment portfolio. Evidence-based investing aims to capture the returns of the market through a low-cost, long-term investment strategy based on the following principles:

  1. Establish your tolerance for risk and do not accept more risk than you are comfortable with.
  2. Diversify your portfolio using globally diversified exchange-traded funds.
  3. Manage the impact of inflation by investing in a well-balanced portfolio consisting of equities and bonds.
  4. Minimise costs by replacing expensive, actively managed funds with low-cost exchange-traded funds.
  5. Control your emotions, and avoid the noise to ensure you stay the course towards your desired outcome.
  6. Rebalance each year to ensure your portfolio remains aligned with your tolerance for risk.

What are the benefits of evidence-based investing?

It has been proved time and again that traditional means of investing (active investment management) do not outperform the benchmarks, even over long periods. Furthermore, financial companies tend to design and sell high-priced products and these higher fees negatively impact on a portfolio’s performance.

Add to this a reliance on past performance (when choosing a fund manager), poor market timing (which hardly ever works), and behaviour-based decision making (generally to the investors own detriment), and you can see why many people fail to achieve their investment goals.

With evidence-based investing the asset allocation within a portfolio is determined by an investor’s specific goals and time frames, and influenced by his or her tolerance for risk. An evidence-based investment will be broadly diversified which means your portfolio should contain equities and bonds (both domestic and international), as well as cash.

By using ETFs, it will also be cheaper and more tax-efficient than actively managed funds which results in higher returns. Evidence has shown that evidence-based (passively managed) funds outperform actively managed funds over the long-term.

Why use exchange-traded funds?

Exchange-traded funds (ETFs) aim to match the performance of a benchmark index. This strategy requires less frequent turnover of holdings within the fund which means fund fees tend to be significantly lower than actively managed funds. When low-cost funds post solid performance, investors keep more of what they earn.

ETFs tend to be more tax-efficient than actively managed funds. When you sell your mutual fund or ETF at a gain, you will have to pay taxes on that gain. But capital gains taxes can be incurred even if you don’t sell your shares, due to trading activity within your fund. Actively managed funds that frequently buy and sell securities are often subject to higher capital gains taxes. Because most ETFs track an index, they tend to be more tax-efficient. Exchange-traded funds allow us to construct portfolios that are globally diversified, flexible and highly liquid.

Is there a minimum deposit or balance?

No. We believe that everyone should have the means at their disposal to save for their future regardless of the size of their wealth, therefore we have no minimum account size. However, our investments are most suitable to those with at least 10,000 (£/$/€) to invest, as balances below this level may limit our ability to create an optimised portfolio.

Am I locked in to my investment?

No. Life doesn’t always go the way we plan it, and sudden, unexpected events may mean you need to access your money sooner than you had intended. For this reason, we prefer to use investments that allow you to withdraw your money whenever you like, without penalty, cost or delay.

Can you help me with my existing investments?

If your investments have performed poorly, or you have received poor investment advice from an adviser that has long since disappeared, we can help. We will be happy to take care of the necessary arrangements for you at no additional cost.

Why should I hire Upstream instead of doing this myself?

History has repeatedly shown us that it is near impossible to consistently beat the market over time. If you believe you can beat the market, and confident you can pick tomorrow’s best performing funds, then we’re probably not going to be a good fit for each other.

The average investor is terrible at investing. In the USA, during the twenty-year period to 2010, the average individual investing in US equity funds generated an annual return of around 4% (Dalbar, 2011), while the market delivered a return of a little under 10%. This occurred because investors chased returns, moving from the funds they were in, to those that seemed to be performing better, destroying their wealth with this buy-high and sell-low strategy. This can be attributed to the emotional aspect of managing your own money, and as a result, many investors are simply throwing their money away. Emotions have the power to destroy significant amounts of wealth.

At Upstream, we help our clients understand how the market works so that at times of market exuberance or panic, you remain focused on the long-term and stay calm. We apply our resources only to things that are within our control. So, when it comes to investing your money, we use low-cost globally diversified funds to ensure we get as close to earning the full return of the markets for your investment portfolio.