5 questions to ask when diversifying your investment portfolio

29 Jan 2021

If you’re thinking of investing your bonus, you may be interested in the answers to these commonly asked questions.

Given the high volatility we’ve seen in the markets over the last year and the current level of uncertainty regarding timescales for economic recovery from the pandemic, diversification is a primary concern for many investors. If you work within the investment banking sector, you may feel this more acutely than most.

To add to the urgency, you may also be set to receive a significant portion of your annual income as a bonus within the next few months. Since diversification can be complex and time-consuming, to fully leverage a bonus or other imminent payment, you may benefit from working with an investment manager. Here are some questions to ask before you do.

Why is receiving a bonus an opportunity to diversify your investment portfolio?

While some see a bonus payment as an occasion for spending, such as buying a property or carrying out home renovations, others see it as capital that can be leveraged for greater growth or income generation. Investing your bonus in a bespoke investment portfolio built around your needs and aspirations and managed according to your wishes could help you achieve your short and long-term financial goals.

When choosing to invest it can be useful to work with the same partner you choose for your other financial needs. Many of our clients value the ability to centralise their assets and financial needs with Investec. We can help you with your day-to-day private banking needs, currency exposure and lending requirements, as well as investment management and financial planning through our colleagues at Investec Wealth & Investment.
man contemplating by a window

Our clients appreciate that we offer a direct relationship with the investment manager responsible for handling their money, rather than a relationship manager, to ensure that nothing gets lost in translation.

How we can help you manage an investment portfolio

Ready to discuss your options? Please get in touch

How can investment professionals benefit from investment management?

As an investment banker, or other industry professional, you may have the knowledge and experience to manage your own investments but lack the time or inclination to do so yourself. In addition, your exposure to market knowledge in your day job may prohibit you from managing your own investments. Therefore, you may be looking for bespoke portfolio management that allows you to leverage insight without demanding too much of your attention and free time.
Not all banks or investment managers are built to service the needs of those with unusual earning patterns, career trajectories and lifestyles, so you might choose to work with a bank that specialises in this sector, such as Investec.
Investment professionals may have a complex income structure and financial needs so it’s important to find the right fit when seeking a partner. Not all banks or investment managers are built to service the needs of those with unusual earning patterns, career trajectories and lifestyles, so you might choose to work with a bank that specialises in this sector such as Investec.

We understand that part of your remuneration may be in vested or deferred stock and that means you need to manage your risk by having a discretionary fund manager who tailors your strategy and diversifies your investments accordingly.

What should you consider when choosing a partner to manage your portfolio?

Many of our clients are investment professionals, who report that they need a partner who listens and responds to their wishes but takes on the responsibility of day-to-day management.

You’ll likely want an investment portfolio that’s built around your individual needs, preferences and ambitions, rather than being shoe-horned into an unsuitable investment solution. You’ll want access to a broad expanse of the market and the opportunity to select the right investments for your objectives. At Investec we offer opportunities across asset classes including fixed income, equities and property as well as alternatives.
 
Our clients within the industry also appreciate that we offer a direct relationship with the investment manager responsible for handling their money, rather than a relationship manager, to ensure that nothing gets lost in translation.

Of course, you may want to ensure your investments meet your values and satisfy ESG (environmental, social and governance) criteria which makes them economically sustainable and ensures they benefit the world we live in.

How can you help me create an investment portfolio with good ESG criteria?

Environmental, Social and Governance (ESG) considerations have long been embedded into our investment processes, as has our active engagement with the businesses that we include in client portfolios. Our Research Team incorporate ESG factors into our investment analysis as standard across all asset classes and maintains a list of best-in-class funds which have a good ESG rating, sustainable focus, or which aim to generate a positive impact.

We can focus your portfolio towards particular ESG areas if you wish, such as environmental funds or social housing investment trusts.

Why is Investec a good match for investment banking professionals?

Investec’s private bank is built to service a small number of forward-thinking, like-minded individuals. Because our specialists are focused solely on investment banking, we understand the nuances of the sector and strive to find tailored solutions to accommodate you.

Our private bankers work with clients with minimum yearly earnings of £300,000 and a net worth of £3million or more. Our bespoke investment management service is typically designed for clients with £250,000 or more to invest, but we have a range of investment products and services suitable for clients with different budgets.

Case study: asset centralisation and portfolio diversitification

The requirement:

A managing director at a major investment bank approached Investec to provide a holistic strategy for his financial affairs and centralise his assets, which include several pension schemes, ISAs, and general investment accounts.

The solution:

Investec took control of these various accounts from the existing providers and created several investment portfolios: a steady growth portfolio for the client, an ESG-focused portfolio for his wife, and JISA portfolios for his children. We created a truly bespoke solution to meet his needs and the needs of his family in a holistic manner. All portfolios were managed with a view to minimising capital gains tax by appropriately using all allowances.
Disclaimer: With investment your capital may be at risk.

For more information about how we can help you with your private banking needs, please get in touch today for an initial conversation.

Investec Bank plc and its subsidiaries recognise and respect the privacy and data protection rights of individuals with regards to personal data. 

We may use your personal data to provide you with services you request from us, or to manage your accounts, make decisions, detect and prevent fraud, fulfil any contractual relationship with you, undertake analysis and assessment, ensure that we comply with legal and regulatory requirements and/or for other purposes where in our legitimate interests. 

For further details as to how Investec uses personal data, please refer to our Data Protection Notice

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