‘Spring clean’ your portfolio before investing in an ISA or pension, says Bestinvest

19 March 2013

After the cold Winter months, Spring officially starts this week on Wednesday 20 March. It’s a time of year when families traditionally give their homes a top to bottom clean and remove any unnecessary clutter. Yet it isn’t just homes that deserve a thorough annual deep clean. According to leading investment firm Bestinvest, Spring is also a time when investors should consider appraising their investments and getting their affairs in order. Yet recent research indicates that as many as one in five investors claim to have never had a review of their portfolio*.

Jason Hollands, Managing Director of Business Development & Communications at Bestinvest, commented: “One of the biggest mistakes investors make at this time of year, when the end of tax year deadline is looming, is to open a new ISA or make a pension contribution without first reviewing their existing portfolio. By selecting new investments as free-standing decisions each year, without considering the context of their overall investment strategy and understanding the strengths and weaknesses of their existing portfolio, investors run the risk of compounding problems such as over exposure to a particular asset class or market and taking on an inappropriate level of risk.”

Bestinvest believes the four key building blocks that investors should consider are their Risk exposure, Asset Allocation, the Quality of their individual holdings and the impact of Costs. However, the firm believes that many investors are too heavily swayed by performance charts, marketing hype and fund tips and are therefore rapidly drawn into fund selection at tax year end without first considering important strategic factors such as Risk and Asset Allocation.

Hollands added: “There is no need to make hasty decisions on fund selection at this time of year, since it is possible to secure your ISA allowance before the deadline with an initial holding in cash and then to spend a little time analysing your current portfolio and strategy, making any necessary changes and then identifying the right new funds to complement what you already hold.”

However, many investors who have in the past used an adviser to conduct a periodic portfolio review may find they are less forthcoming this year. New rules banning receipt of commission for the provision of financial advice mean that that an adviser who conducts a personalised review of their client’s investments will be required to cease receipt of existing commissions and instead starting charging the client an explicit fee instead. Some advisers may be disinclined to interrupt such recurring income.

As an alternative, Bestinvest has developed a free service to enable investors to self-appraise their portfolios at no cost. The Free Investment Report Service & Tool – first – has already been used by thousands of investors to analyse their portfolios and has been described by The Platforum, an advisory and research business focused on investment platforms, as “clear, simple to understand” and backed up with “excellent” customer service. Over 11,500 investments can be analysed by first, with a report either self-generated online at www.bestinvest.co.uk/first or set through the post (call 020 7189 2452 for details). A mocked-up copy of a first report is attached with this release.

*An online survey undertaken by YouGov for Bestinvest in October 2012 among GB investors asked “How often does your main adviser/broker provide you with a review of your existing investments?” Some 37% reported that they had either never had a review (22%) or only when they had requested one (15%).

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Important information
The value of investments, and the income derived from them, can go down as well as up and you can get back less than you originally invested. This article does not constitute personal advice. If you are in doubt as to the suitability of an investment please contact one of our advisers.

About Bestinvest:
Founded in 1986, Bestinvest was a pioneer of helping clients reduce the costs of investing through discounting commissions. Today Bestinvest has grown into a leading private client adviser which helps over 50,000 investors. Bestinvest offers a range of services including guidance, investment advice, financial planning and discretionary portfolio management all of which are underpinned by a commitment to rigorous investment research. Through its low cost Select service, Bestinvest offers execution-only investors a Self-Invested Personal Pension Plan (SIPP), Individual Savings Account (ISA), Junior ISA (JISA) and Investment Account with access to more than 2,000 funds as well as investment trusts, shares and Exchange Traded Funds. Bestinvest has won numerous awards including ‘Self-Select ISA Provider of the Year 2011’ and ‘UK Wealth Manager of the Year 2011’ as voted by readers of the Investors Chronicle and Financial Times and Investment Adviser of the Year 2012 at the Professional Adviser Awards. Headquartered in Mayfair, London, Bestinvest has 14 regional offices with 200 staff servicing clients with over £4 billion of assets.

About Tilney

Tilney is a leading investment and financial planning firm that builds on a heritage of more than 150 years. The Tilney Group operates under the Tilney brand for Investment Management and Financial Planning and Bestinvest for execution-only investing. We look after more than £22 billion of assets on our clients’ behalf and pride ourselves on offering the very highest levels of professional client service with transparent, competitive pricing across our entire range of solutions.

We offer a range of services for clients whether they would like to have their investments managed by us, require the support of a highly qualified adviser, prefer to make their own investment decisions or want to take more than one approach. We also have a nationwide team of expert financial planners to help clients with all aspects of financial planning, including retirement planning.

We have won numerous awards including Best Fund Platform and Best SIPP Provider at the 2017 City of London Wealth Management Awards; Investment Award – Cautious category in the Private Asset Management Awards; and Stockbroker of the Year, Execution-only Stockbroker of the Year and Self-select ISA Provider of the Year 2015, as voted by readers of the Financial Times and Investors Chronicle. We are pleased that our greatest source of new business is personal referrals from existing clients.

Headquartered in Mayfair, London, Tilney Group employs over 1,000 staff across our network of offices, giving us full UK coverage, and we combine our award-winning research and expertise to provide a personalised service to clients whatever their investment needs.