First and foremost thank you for taking the time to read my blog. I would also like to stress that the information in the blog should not be taken as advice, but a documentation of my education into derivatives. Before I plow on with my exploration of the derivatives market, I will take some time to explain why I'm doing it and what I hope to achieve.
Since qualifying from university in 2006 with a Bachelor of Science in Economics I have become a fully qualified Independent Financial Adviser and Wealth Manager. After spending some time in Florida (where I met some of those people worst affected by the 2007 Credit Crisis and also those who had made billions shorting the sub-prime mortgage market) I decided that upon returning I had to move to the City (of London) and work for my self, however difficult it may be.
Eight months on things are going well. My assets under management (AUM) are growing faster than I could have hoped for, I have managed to latch onto a niche section of the e-financial market in its infancy and in an industry of old men, my clients see my advise as a breath of fresh air.
The usual remit of most IFAs, when it comes to investing their clients funds, are collective investments. Go back 10 years and the average IFA would have sold you a pension contract, plonked you in the <insert insurance company here> Balance Managed Fund after asking you to complete a "Risk Questionnaire" and never spoken to you again. Thankfully this was before my time and with the advent of the internet, investors are becoming more knowledgeable. Most advisers now have some sort of investment process in which they match a portfolio of diversified collectives to the clients attitude towards investment risk.
My current investment process is a three step, top-down process. The first (and most important step) is asset allocation - this is where we chose the spread between fixed interest, equity, and esoteric investments depending on various levels of risk. The second step involves tactical asset allocation which allows us to make small tactical positions in areas that we feel will do well over the short term. Finally, we select collective investment funds that fit our requirements.
Most advisers (should!) understand the fundamental financial instruments that their clients are investing in via collective investment funds. Historically these have been equities, gilts, corporate bonds, cash deposits and commercial property. However, in order to build a truly diversified portfolio in which to minimize risk and maximize return, esoteric investments must be included, and to include them they need to be understood.
When I meet my friends that are investment bankers or hedge fund managers in the City, or attend a presentation by one of the leading hedge fund managers I want to understand exactly what they are talking about and have an educated discussion with them. I want to be able to explain to my clients the effects these investments can have on both a micro and macro level. I want to be armed with a library of information to provide the high net worth and ultra high net work clients out there with the investment knowledge that they deserve.
But foremost, being an IFA isn't enough for me. I get easily bored of the mundane tasks involved in day to day advice. I want to take a step up the ladder into the exciting world of trading and I will use this blog to document my experiences.
I look forward to your comments and thank you in advance for any help and advice that you may offer.
Sincerely,
