Town Close Financial Planning (TCFP) Investment Update

We are pleased to announce an important evolution in our investment approach. Towards the end of this year the plan is to move away from our current model portfolio system and into two dedicated funds: Market Growth and Market Defensive, that TCFP directly manages.

This change lets us manage your investments more nimbly, respond more quickly, and keep a close eye on costs.

Since we started in 2014, we’ve always looked for ways to improve our service to you and your outcomes, for example:

• Introducing cashflow forecasting to help you plan ahead.

• Switching to model portfolios, which cut costs and make managing investments more efficient.

• Moving from advisory to discretionary investment management, so we can make decisions faster and take advantage of market opportunities.

This next step – creating our own funds – is a natural evolution. It will make us more nimble, reduce admin, and give us more investment flexibility.

Right now, making changes to your portfolio takes time. We have to rebalance everything in bulk, which isn’t as quick as we’d like. With these new funds, we can make investment decisions in close to real time, rather than rebalancing everything in slow, bulk moves.

Yes, costs will go up slightly (by around 0.3% – 0.4% pa). We believe the greater efficiency and flexibility this structure gives us represents good value. Though, as with any investment, future costs and returns can't be guaranteed. Here’s how:

• We can access institutional pricing.

• The larger scale of the funds will help keep overall costs down.

• Investment changes won’t trigger capital gains tax, meaning fewer tax implications for you.

We believe these efficiencies are a sensible trade for the small increase in cost. The value of investments can still fall as well as rise, and past performance is not a guide to the future.

The Market Growth Fund (focused on equities) and the Market Defensive Fund (focused on bonds) will each hold 20–25 carefully chosen investments. This allows us to be much more precise with asset allocation than our current four-fund model. We’ll have the flexibility to make tactical adjustments and take advantage of opportunities as they arise.

Instead of seeing lots of different holdings in your portfolio, you’ll now see just two: MGTSTown Close Market Growth and MGTS Town Close Market Defensive. Inside these, you’ll find familiar names like Vanguard, HSBC, Invesco and iShares, giving us the diversification we want while keeping things simple for you. You’ll also be able to track their performance easily, with daily pricing and clear reporting.

Your existing investments will be transferred into these two funds, but the way we manage your money and your overall strategy will remain the same. You’ll still be invested in a carefully balanced mix of equities and bonds, tailored to your needs.

• Your financial plan and risk level won’t change.

• The same team will be managing your investments.

• We’ll continue to oversee everything as we always have.

• Who is managing the funds? We’ve partnered with Margetts, a company with a solid track record in fund administration. They’ll handle the day-to-day running of the funds, while we’ll continue to manage investment decisions.

• What if something happens to Jeremy? We have robust continuity arrangements in place, so your investments are never dependent on any one person. Whatever happens, the same disciplined approach carries on.

• What about risk? This change is designed to let us manage risk more nimbly, not to remove it - no structure can do that. You'll still be invested in a well-diversified portfolio, just managed in a smarter way. As a regulated fund structure, it also brings additional investor protections.

• Now – The process of setting up the funds is underway.

• Over the next 6 months – We’ll be working behind the scenes to get everything ready.

• Test Phase – We’ll start with staff and personal accounts to make sure everything runs smoothly.

• Main Transition – We’ll move client portfolios over a weekend to keep disruption to a minimum.

• Review & Feedback – Once everything is up and running, we’ll check in to make sure you’re happy and answer any questions.

We’ll keep you updated at every stage and make sure the transition is seamless.

We know this is a big change, and you might have questions. That’s why we’re holding a live Q&A session where you can hear more about the new funds, ask anything on your mind, and chat with our investment team.

This is an exciting next step for TCFP, and we truly believe it will make a positive difference for you. If you’d like to chat before then, just give us a call or drop us an email – we’re always happy to help.

As with all investing, your capital is at risk and the value of your investments can go down as well as up. You may get back less than you invest. This update is general information about a change to our service, not personal advice.