Fitzpatrick's Financial Advisors
In 1963 Dick Fosbury was a high school athletics student who struggled to compete in the high jump event using the standard straddle method. He simply didn’t have the leg strength of his competitors. Undeterred, Dick developed a technique for jumping, known today as the Fosbury Flop.
In 1968, Dick won an Olympic Gold Medal and the Fosbury Flop soon became the only technique used in international high jump competition. This remains the case today.
Like Dick Fosbury, we believe that blindly following ‘industry imperatives’ is not necessarily the most appropriate strategy for handling clients' investments. Our business and service offering must continually evolve to incorporate evidence based on proven advantages, even though these may not yet be the ‘industry imperative’. Constant review of methodologies ensure our clients receive only the best possible investment advice.
Our Investment Service
The role of the Fitzpatricks Adviser is to act as the intermediary and expert in setting and managing client expectations.
Our centralised Investment Service aims to achieve the best return for the risk/volatility that a client selects after personal consultation, whilst also considering the person's investment preferences.
A Managed Discretionary Account (MDA) incorporating a Strategic Risk Allocation (SRA) approach is used to achieve clients’ individual preferences. This may include a preference for an exposure to direct Australian shares.
The Strategic Risk Allocation Approach
Our Strategic Risk Allocation (SRA®) approach is a risk targeting/unstructured benchmark approach to investing. It was pioneered by David Swenson of the Yale Endowment Fund and gained widespread appeal as David used it to consistently outperform peers – and by a significant margin.
The strategic risk allocation approach is now embraced by some of Australia’s largest superannuation funds such as Funds SA and government bodies like Queensland Investment Corporation (QIC) and Victorian Funds Management Corporation (VFMC). The SRA® approach is popular because it is expected to deliver higher returns for the targeted level of risk/volatility.
There has been debate at the highest levels of the investment industry about how best to integrate the full range of investments that have become widely available in the last 5 to 10 years. Most multi-manager, multi-asset class investors are taking only ‘baby steps’ away from established industry norms to incorporate these philosophies and methodologies into their portfolios.
For a skilled investor, the wider the range of investment products to choose from, the greater the expected return. The Strategic Risk Allocation version of the modern investment approach allows an investor to invest in anything, provided that (in aggregate) the portfolio meets the risk constraints laid out by the investor. This approach is not dissimilar to that taken by major banks to manage their own balance sheets.
This is just a summary of an intricate process, so please call one of our Advisers to discuss how the Strategic Risk Allocation approach to investment could benefit you.
Click here to download a more detailed overview of the Strategic Risk Allocation Approach.
Click here to download our SRA Product Disclosure Statement.