At Barclays, we have developed a unique approach to wealth management. We understand that wealth means different things to different people. Using our collective expertise, we can help you focus on what's important to you and help you create an Investment Portfolio tailored to your financial personality and objectives.
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* Diversification does not protect against loss.
** Rebalancing does not guarantee an investor's goals and objectives will be met.
Our Investment Philosophy combines insights from the science of behavioral finance and psychology with modern theories of portfolio management. By considering the emotional aspects of investment decision-making, we can gain a more accurate understanding of you as an investor.
By looking at every aspect of your wealth from a holistic perspective, we aim to create a customized portfolio that matches your objectives and financial personality, while maintaining a level of risk with which you are comfortable.
Understanding your wealth
Our first step is to assess where you are right now. The more we know about you, the better we can serve you. Building up a comprehensive picture of your wealth situation helps us see where the gaps are, where you might be over-exposed to risk, and make sure that no appropriate opportunities are missed.
It also means we can take a closer look at how you think about money. In our experience, clients intuitively group their assets into three categories:
Personal Holdings - you can think of these as assets that maintain your lifestyle. Examples include transactional cash reserves, your main residence or collection of fine art.
Investment Portfolio - this is a diversified1 selection of assets designed for long-term growth while taking an appropriate degree of risk.
Business and Opportunistic Investments - usually concentrated-risk assets in which you have strong convictions or expertise. These ideally should be assets which you are directly involved with and exert decision making and risk control over (e.g., your own business and entrepreneurial interests). Often associated with who you are, or what you do for a living, and your aspirations to significantly change your level of wealth. Be wary of overconfidence encouraging these concentrated holdings.
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Many people invest too much in Personal Holdings or Business and Opportunistic Investments (driven by emotion or conviction) and not enough in their Investment Portfolio (based on discipline and rationality). Understanding why certain investments are important to you personally helps us to realize what you really want from your wealth. We can then suggest ways to rebalance2 our investments across the three groups, in order to manage your assets efficiently.
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Understanding your financial personality
Traditionally, investment advisors were mainly interested in finding out where you stood on the scale of Risk Tolerance; whether you are "conservative", "moderate" or "aggressive". Investors would then be prescribed set portfolios accordingly.
By contrast, our approach aims to create a high resolution picture of you as a multi-faceted, financially-aware individual with a complex mix of attitudes, goals and aspirations. Risk Tolerance is crucially important, but there is much more to investment attitudes than that.
At Barclays, our behavioral finance specialists have developed a unique tool - the Financial Personality Assessment (FPA) - that enables us to build a highly detailed profile of your preferences and attitudes. This innovative approach enables us to take portfolio planning to a new level, utilizing insights from leading thinkers in finance and psychology.
Using the FPA, we measure six key dimensions that, in combination, reveal how you think and feel about wealth and investments. The results of the FPA help you clearly understand the basis of our investment recommendations and provide context regarding how you make financial decisions.
While the FPA questionnaire is optional, it only takes a few minutes to complete and allows us very quickly to understand multiple aspects of your financial personality in a robust, objective and scientific manner. Three of the six key factors reflect your attitude to risk; the other three reveal how you make investment decisions.
Because we understand your attitudes to investment in detail, we can then reflect these in your portfolio. As part of your Wealth Review, we will also look at other essential components of your investment profile, such as your overall time horizon, income requirements, liquidity profile and tax situation. All these will affect how we manage your portfolio, and which services we offer, in order to provide a mix of wealth management services that's personalized for you. The best solution depends upon both your personality and your investment objectives.
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Advice with a global perspective
At Barclays, our analysts are dedicated to addressing the unique needs of private clients. As part of the Barclays, we are also able to call upon the award-winning research capabilities of Barclays Capital in formulating our key investment ideas3.
The most appropriate long-term investment strategy aims to maximize your potential returns in line with the amount of risk you are willing to accept. With your Wealth Review and FPA as the foundation, we start by selecting appropriate overall investment strategy for you - using our knowledge of your Risk Tolerance to identify one of five model portfolios as our starting point.
We combine nine asset classes with our long-term strategic views into efficient model portfolios matched to five separate risk profiles. These are suitable for the full range of financial personalities. We then use short-term tactical adjustments to help enhance portfolio returns or defend against specific risks.
Diversifying1 investment across a range of asset classes not only gives exposure to a wider set of opportunities to help achieve sustainable growth, but also helps to spread risk.
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Tailored portfolio construction
Our understanding of your financial personality helps us find the best ways to implement your investment strategy. For example, your attitude to Market Engagement will determine both the timing of your investments and the type of investments we recommend. Similarly, clients with high Perceived Financial Expertise may be more comfortable with the complexity of private equity or hedge funds. An investor's Belief in Skill will help determine whether index funds or actively managed portfolios make the most sense.
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Creating the portfolio that's appropriate for you
We will also use our knowledge of your personality to customize your portfolio in other key areas, including:
Liquidity - the appropriate proportion of a liquid investment allows you to take advantage of the potentially higher returns available from less liquid investments, while still feeling comfortable about your ability to access your wealth.
Smoothing - some investments can help to offset the effects of market volatility, potentially giving you steadier, more consistent returns (though this may involve sacrificing some of the upside).
Downside Protection - we can suggest strategies and solutions that may limit the extent of potential losses, helping to safeguard your capital and at potentially minimal cost in terms of long-term performance.
Active Management - your portfolio can be tailored to your own convictions about the importance of investment skill. Clients with high conviction in the power of active management can benefit from our in-depth research on fund managers, while clients with low conviction can invest passively using investments like index funds and structured notes.
We will also make ongoing recommendations to help you capitalize on opportunities across world markets.
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Customized management
Global investment markets don't stand still - so why should your Investment Portfolio? Our ongoing monitoring and management enables your portfolio to be adapted to the changing environment, so it remains appropriate for your needs.
For example, if an opportunity arises in a particular asset class, there is a strategic change to a fund manager or investment platform, or your portfolio's risk/return profile deviates from our expectations, we will take action to help protect your interests.
As you would expect from a personalized portfolio, we offer a variety of ways to manage your money to suit your personality. These range from discussion of every transaction with you in advance, to appointing our U.S. national trust company, Barclays Wealth Trustees (U.S.), N.A. as corporate trustee with discretion over day-to-day investment decisions.
Some clients are reluctant to invest all their wealth into their preferred asset classes in one go, because they are worried that early losses may never be recouped. Some will want to continually alter their portfolio to take advantage of tactical opportunities, while others may prefer a stable, long-term approach. Our aim is to work with you and manage your portfolio in the way that best matches your preferences and helps to meet your needs.
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Staying in touch
Our Wealth Management Reporting system provides consolidated portfolio-focused and performance-orientated reporting to clients.
Your Investment Representative will be your contact at every stage of your investment journey. By conducting regular Wealth Reviews, we can evaluate your circumstances as they change and offer new insights and solutions to help you manage and pass on your wealth.
All in all, we want to provide a professional, personalized investment service with which you can feel completely comfortable.
For more information, contact your Investment Representative or call +1 800 392-5000 or +1 212 526-2039.
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Notes
The price and value of investments and their income may fluctuate and may fall against your interest. You may get back less than you invested. Any information on past performance is not necessarily a guide to future performance. Techniques described have considerations beyond the scope of this presentation; investors should consult legal or tax advisors regarding their specific situation.
1 Diversification does not protect against loss.
2 Rebalancing does not guarantee an investor's goals and objectives will be met.
3 Institutional Investor magazine's 2009 "All-America Research Team" surveys. Award referenced does not relate to investment advisory products or services offered by Barclays Wealth in the Americas.
This information for the internet does not disclose all the risks and other significant issues related to an investment in the securities/transaction. Prior to transacting, potential investors should ensure that they fully understand the terms of the securities/transaction and any applicable risks.
The services mentioned in this document may not be suitable for all investors. Investors are urged to consult their own tax or legal advisors with respect to the impact on their personal situation of any potential strategy or investment. This document does not constitute a prospectus, offer, invitation or solicitation to buy or sell securities, and is not intended to provide the sole basis for any evaluation of the securities or any other instrument, which may be discussed in it. It is not a personal recommendation and you should consider whether you can rely upon any opinion or statement contained herein without seeking further advice tailored for your own circumstances. Past performance does not guarantee or predict future performance. Investment products may be subject to investment risks, involving, but not limited to, market and currency exchange risks, fluctuations in value and possible loss of the sum invested.
This information is confidential, is intended only for intended recipients and their authorized agents and may not be distributed to any other person.
IRS Circular 230 Disclosure: Barclays Capital Inc. and its affiliates do not provide tax advice. Please note that (i) any discussion of US tax matters contained in this communication (including any attachments) cannot be used by you for the purpose of avoiding tax penalties; (ii) this communication was written to support the promotion or marketing of the matters addressed herein; and (iii) you should seek advice based on your particular circumstances from an independent tax advisor.
We are committed to providing equal access to our services for all clients with disabilities. If you would like this document in Braille, large print or audio tape, please contact your Investment Representative.
Barclays offers wealth management products and services to its clients through Barclays Bank PLC (“BBPLC”) and functions in the United States through Barclays Capital Inc. (“BCI”), an affiliate of BBPLC. BCI is a registered broker dealer and investment adviser, regulated by the U.S. Securities and Exchange Commission, with offices at 200 Park Avenue, New York, New York 10166. Member FINRA and SIPC.
Barclays Bank PLC is registered in England and Wales (registered no. 1026167) with a registered office at 1 Churchill Place, London, E14 5HP, United Kingdom. Barclays Bank PLC is authorized and regulated by the Financial Services Authority. Securities are offered in the U.S. through Barclays Capital Inc. member FINRA, NYSE and SIPC.
