Investment Advice Services

One part of your wealth may be intended to support retirement over several decades. Another may be needed for a property purchase within a few years. You may want to preserve liquidity for family commitments or retain capital for future opportunities.

Those objectives can require different approaches.

Before making an investment recommendation, it is important to understand:

• what the money is intended to achieve
• when you may need access to it
• how much investment risk is appropriate
• your existing investments and other assets
• your expected future income
• your ability to bear investment losses
• relevant investment preferences

This is central to regulated investment advice.

Under MiFID II, firms providing investment advice must obtain the information necessary to recommend financial instruments that are suitable for the client, including information about their financial situation, ability to bear losses, investment objectives, and risk tolerance.

The portfolio follows the objective, not the other way around.

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Concentration can build quietly. 

A successful career may leave you with substantial shares in one employer. 

A business owner may have much of their net worth tied to one company. 

Property can represent a large proportion of family wealth. 

Several investment funds can appear diversified while holding many of the same underlying companies. 

Diversification aims to avoid unnecessary dependence on a single investment, market, sector or source of return. 

It does not remove investment risk, and a diversified portfolio can still fall in value. 

The appropriate level and form of diversification depend on your wider circumstances and the role of the portfolio. 

Relocation is a sensible point to review an investment portfolio. 

It is not automatically a reason to change it. 

An investment that was established while you lived in another country may still be appropriate. Equally, a change in residence can alter the practical context around an account or provider. 

Questions can include: 

• Can the existing provider continue to service you? 
• Does the portfolio still reflect your objectives? 
• Has the currency of your future spending changed? 
• Do you expect another move? 
• Does the investment remain suitable for your timeframe and risk profile? 
• Are there local tax questions requiring separate specialist advice? 

Changing investments can have consequences of its own. 

A review should therefore come before a decision to retain, restructure or replace an existing arrangement.

International investors frequently hold assets and future liabilities in different currencies. 

For example, you may hold investments denominated in sterling while expecting to fund retirement spending in euros. 

Currency movements can affect the value of those investments when measured against your future spending needs. 

That does not mean all foreign-currency exposure should be removed. 

Currency exposure can arise through: 

• the currency in which an investment is priced 
• the underlying assets owned by a fund 
• overseas income 
• future expenditure 
• property 
• pensions and other financial assets 

The relevant question is how currency exposure affects your investment objectives and wider financial position. 

This is an investment-planning consideration, not a standalone foreign-exchange management service.

Retirement often changes the role of an investment portfolio. 

During your working life, you may be adding capital regularly and have limited need for withdrawals. 

Later, investments may need to help support expenditure. 

That can make questions around risk, liquidity and withdrawal strategy more important. 

Investment planning for retirement can consider: 

• expected spending 
• other sources of retirement income 
• pension assets 
• investment timeframe 
• liquidity 
• capacity for loss 
• expected withdrawals 
• portfolio risk 

Retirement planning may also involve pension, tax and estate considerations beyond investment advice. 

Where specialist tax or legal advice is required, it should be provided separately by appropriately qualified professionals. 

Pensions can represent a significant part of an investor's long-term assets. 

They can also involve more than investment selection. 

Existing pension arrangements may contain: 

• particular benefits 
• guarantees 
• access rules 
• investment choices 
• charges 
• death benefits 
• transfer restrictions 

For clients who have worked internationally, pensions may also have been accumulated in several countries. 

The objective should not be to transfer or consolidate pensions simply for administrative convenience. 

Where pension advice falls within the relevant service and permissions, the existing arrangement and available options need to be considered carefully before a recommendation is made. 

Some pension matters may require additional specialist advice or fall outside the services available through HCM EU. 

Some investors want environmental, social or governance considerations reflected in their investments. 

Those preferences can form part of the investment-advice process where relevant. 

They still need to be considered alongside: 

• financial objectives 
• risk 
• diversification 
• timeframe 
• liquidity 
• product characteristics 

Sustainable or responsible investing does not remove investment risk, and labels can encompass different approaches. 

Understanding what a particular investor means by sustainability is therefore important before considering suitable investments. 

Some investors may consider investments outside conventional listed equities and bonds. 

Depending on the instrument, these can introduce characteristics such as: 

• limited liquidity 
• longer holding periods 
• more complex valuation 
• different fee structures 
• higher minimum commitments 
• additional investment risk 
• restricted eligibility or target markets 

They are not appropriate for every investor. 

Business owners often accumulate wealth differently from salaried professionals. 

A substantial proportion of net worth may remain tied to the company. 

That can mean personal financial exposure is concentrated in: 

• one business 
• one industry 
• one economic environment 
• one source of income 

Investment planning can consider the assets held outside the company and what role they need to play in the owner's wider financial position. 

An eventual business sale can create another significant change, as concentrated private-company wealth becomes liquid personal capital. 

Corporate finance, business-sale structuring, company law and tax advice are separate specialist areas and are not presented as HCM EU investment-advice services. 

A business sale, inheritance, property disposal or other significant event can create a substantial amount of investable capital. 

There is no requirement to invest everything immediately. 

Before deciding how the capital should be invested, it can be useful to separate: 

• immediate spending 
• known liabilities 
• cash reserves 
• capital required within the next few years 
• longer-term investment capital 

The appropriate strategy depends on what the money needs to achieve. 

A large cash balance can feel like a single investment decision. 

In practice, different parts of that capital may have very different purposes and timeframes. 

Tax can affect the outcome of investment decisions. 

But HCM EU does not provide tax advice. 

This distinction is important. 

Investment advice may identify that tax could be relevant to a proposed action, for example when considering the disposal of an existing investment or a change following relocation. 

The tax consequences themselves should be assessed by an appropriately qualified tax adviser where required. 

Investment recommendations can then take relevant specialist tax advice into account without presenting HCM EU as the provider of that tax advice. 

Investments can form part of an individual's eventual estate. 

Ownership, beneficiaries, family circumstances and cross-border connections may therefore be relevant to the wider financial context. 

HCM EU does not provide legal, will-writing or trust services. 

Where succession law, wills, powers of attorney, trusts or other legal matters need to be addressed, advice should be obtained from an appropriately qualified legal professional. 

The investment-advice role is narrower: to understand relevant client circumstances where they affect investment objectives and recommendations. 

Property and financial investments often sit on the same personal balance sheet. 

A client with substantial property exposure may have different diversification and liquidity considerations from someone whose wealth is predominantly held in financial assets. 

Property can affect: 

• overall concentration 
• liquidity 
• borrowing 
• future capital requirements 
• retirement plans 
• currency exposure 

HCM EU does not provide general property, conveyancing or property-tax advice through its investment-advice service. 

The relevant question is how existing or planned property ownership affects the financial and investment position. 

An investment portfolio is established at a particular point in time. 

Your life does not remain there. 

Over time, you may: 

• retire 
• move country 
• sell a business 
• receive an inheritance 
• buy or sell property 
• change career 
• support family 
• alter your spending plans 
• change your investment preferences 

Markets and investment conditions also change. 

Ongoing advice provides an opportunity to review whether the portfolio remains suitable for your circumstances and objectives. 

That does not mean making frequent changes. 

Sometimes the appropriate conclusion after a review is that the existing strategy remains suitable. 

A good investment process does not require constant action. 

Periods of market volatility can make changing strategy feel urgent. 

So can news, short-term performance or the recent success of a particular asset. 

But investment decisions should remain connected to the purpose and timeframe of the portfolio. 

Before making a material change, useful questions include: 

• Has my objective changed? 
• Has my timeframe changed? 
• Has my capacity for loss changed? 
• Has my need for liquidity changed? 
• Has my personal situation changed? 
• Has the investment ceased to be suitable for its intended role? 

If the answer is no, short-term market movement alone may not justify changing a long-term strategy.