Our Philosophies

Our Investment Philosophy

Our core beliefs can be summarised by the following complementary statements:

  1. We aim to help our clients identify and achieve their investment goals and objectives.
  2. We believe that advice strategy is also critical in managing investment risk and sequencing risk. That includes using cash reserves, liquidity as well as different strategic asset allocation (SAAs) for various medium and long-term timeframes.
  3. It is critical that a clients’ investments are transparently and clearly linked to their goals.
  4. We invest for the long-term, focusing on income generation and capital growth to meet client’s needs and objectives.
  5. Diversification leads to more reliable investment outcomes.
  6. We take no more risk than is required to meet a client’s goals and objectives.

Our investment beliefs are set our below

General Investment Beliefs:

  • Effective personal portfolio management begins with the discussion between adviser and client. We aim to help our clients identify and achieve their investment goals and objectives. It is critical that clients’ investments are transparently and clearly linked to their goals
  • Effective governance can prevent or mitigate adverse effects on client portfolios. Strong governance is a return driver over the long run.
  • Austin’s focuses on managing exposures to risks that can be rewarded, and minimising exposure to risks that are less likely to be rewarded. Simply choosing highly rated investments does not ensure a quality portfolio. Investments used in portfolios need to complement each other and to offer positioning or skills that suit the prevailing environment.
  • Tax effective income flows are a cornerstone of Austins portfolios. Capital growth is important and a function of earnings growth.
  • Certain asset classes may be more efficient than others. Less efficient asset classes provide more opportunity for active fund managers to add value, after fees.  In highly efficient asset classes taking an index-based approach to investing may at times provide better value for money.

Investment Selection Beliefs

  • Research indicates asset allocation is the key driver of longer-term investment performance. An appropriate Strategic Asset Allocation is the cornerstone of portfolio construction and through-the-cycle risk-adjusted returns.
  • Complex investments often coincide with a lack of transparency, difficulty in assessing risk/reward, opaque embedded fees and disappointing risk-adjusted returns.
  • Passive options can:
    • gain access to more efficient markets at a lower ongoing cost,
    • improve portfolio diversification,
    • reduce the reliance on chasing manager alpha,
    • in some cases, help improve after-tax returns.
  • Managers that exploit inefficient markets, can use more degrees of freedom (e.g. long short) or focus on best ideas tend to be best exploited for excess returns (alpha).
  • Australian dividends have been a stable source of income and Austins expect them to remain so. Austins see equity prices as a reflection of future cash flows. Income flows are the cornerstone of Austins portfolios, while capital growth is seen as a result of strong earnings.
  • Austins focuses on managing exposures to risks that can be rewarded, and minimising exposure to risks that are less likely to be rewarded. Austins aims to take only as much risk as is required to reach an investment objective.

Execution Beliefs

 

  • Austins links client objectives clearly to portfolio implementation. Appropriate implementation decisions can help control costs and other risks in the planning process.
  • Austins looks for cost effective and efficient implementation of their investment process.
  • Direct implementation of an investment portfolio can provide a range of benefits such as greater control to manage turnover, taxation and liquidity.

Our Personal Insurance Philosophy

Our personal insurance philosophy is based on replacing personal exertion income, so that in the event of unforeseen death, serious illness or injury to a member of the family or partnership, life from a financial viewpoint can continue with minimal financial impact.

There are a number of options regarding each of the following cover types:

  • Income Protection – in the event of injury or illness and the life insured is unable to work, they could be paid a monthly benefit of up to 75% of their income to replace lost earnings
  • Critical Illness (Trauma) – in the event of a major injury or illness (as defined by the contract) to the life insured a lump sum is paid to cover expenses and other costs associated with the trauma
  • Life Insurance – pays a lump sum upon death of the life insured
  • Total and Permanent Disability – pays a lump sum when the life insured is totally and permanently disabled (as defined by the contract)
  • Through the combined expertise of AFS and our professional partners, we can advise on the best way of structuring your insurance so that it is in line with your overall financial strategy.