Financial planners have been increasingly looking to transition their clients into asset class portfolios.

Plan B's asset class investing was once restricted to wealth management advisers within the company. We have since made our investment services available to independent wealth management advisers through the Affinity Partner Program.

Asset class investing principles demonstrate that the selection of asset classes, rather than stock picking or market timing, are what deliver a consistent longer-term investment performance for clients with greater certainty, less risk and more control.

Accordingly, our portfolios are constructed on these four principles:

1. Markets are efficient
Markets work, and for investment purposes securities are fairly priced.

2. Risk and return are related
Investments earning higher relative returns usually carry higher risk.

3. Diversification is essential
Diversification reduces uncertainty. Investment strategies concentrated in relatively few securities increase risk without providing additional expected return.

4. Structure explains performance
Investment strategies should be designed to capture stronger exposure to the factors that drive returns, i.e. small and value companies, as outlined above. Transaction costs should be minimised through innovative trading techniques, portfolio engineering and portfolio structure.