High profile planners adopt fee-based model

The financial planning business run by Richard and Alison Renfrew, Lyford Asset Management, has launched a new business focused on providing pure fee-based investment advice.

Thursday, October 15th 2009, 5:29AM 3 Comments

by Sonia Speedy

The new firm - Lyford Independent Investments - will employ psychometric profiling to ensure investors are matched to the appropriate risk profile and will take on a Robust Frontier portfolio modelling approach, rather than the more traditional asset allocation method of Efficient Frontier portfolio modelling. The business will be aimed at sophisticated investors with at least $200,000 to invest and is independent of any one product provider.

"What we are doing with this new company is basically (having) a crystal clear focus in terms of we'll only do investment and it's crystal clear in terms of fees: there's no commission fees retained anywhere, everything is being fully disclosed," Lyford Independent Investments director Dr Richard Renfrew says.

Renfrew spent the last year researching the disparity between what New Zealand investors wanted and what was available in the market. He found that independent and transparent advice; fee-based portfolios; and forward-looking asset allocation, (utilising forecasting based on the addition of income, growth in income and the effect of a changing valuation ratio), were the three core needs.

"Without a paradigm shift in the industry now, we risk the same cycle of offering products over needs, and losing the confidence of existing and potential investors wanting to feel secure that they are in safe hands," Renfrew says.

The firm will use FinaMetrica for its psychometric profiling, while Renfrew describes the Robust Portfolio Modelling technique, as something becoming more mainstream in the United States.

"I believe it flags better the market extremes than what the traditional modelling does," he says.

Lyford Asset Management will continue offering broader financial planning services.

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Comments from our readers

On 16 October 2009 at 2:04 pm michael cave said:

Saturn Portfolio Management have been using fee approach and full disclosure for some time.

On 16 October 2009 at 2:11 pm Joe Higgs said:

National Bank Private BAnking have been providing a fee based investment service and full disclosure since 1995.

On 17 October 2009 at 1:47 pm John Milner said:

Look out Little Red Riding Hood public. Grandma may not be who she says she is. Is that a Lyford Asset Management tail sticking out of Grandmas clothes?
An age-old children’s story best left at that Richard.