www.wealthadviser.coMay 2016

Coverline 1 Coverline 2 Coverline 3

Wealth Adviser Awards 2016

WEALTH ADVISER AWARDS Special Report May 2016 www.wealthadviser.co | 2

CONTENTS

Managing Editor: Beverly Chandler, beverly.chandler@globalfundmedia.com Contributing Editor: James Williams, james.williams@globalfundmedia.com Online News Editor: Mark Kitchen, mark.kitchen@globalfundmedia.com Deputy Online News Editor: Leah Cunningham, leah.cunningham@globalfundmedia.com Graphic Design: Siobhan Brownlow, siobhan.brownlow@globalfundmedia.com Sales Managers: Simon Broch, simon.broch@globalfundmedia.com; Malcolm Dunn, malcolm.dunn@globalfundmedia.com Marketing Administrator: Marion Fullerton, marion.fullerton@globalfundmedia.com Head of Events: Katie Gopal, katie.gopal@globalfundmedia.com Head of Awards Research: Mary Gopalan, mary.gopalan@globalfundmedia.com Chief Operating Officer: Oliver Bradley, oliver.bradley@globalfundmedia.com Chairman & Publisher: Sunil Gopalan, sunil.gopalan@globalfundmedia.com Photographs: Chris Mikami, www.mikami.co.uk Published by: GFM Ltd, Floor One, Liberation Station, St Helier, Jersey JE2 3AS, Channel Islands Tel: +44 (0)1534 719780 Website: www.globalfundmedia.com

©Copyright 2016 GFM Ltd. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher.

Investment Warning: The information provided in this publication should not form the sole basis of any investment decision. No investment decision should be made in relation to any of the information provided other than on the advice of a professional financial advisor. Past performance is no guarantee of future results. The value and income derived from investments can go down as well as up.

Publisher

In this issue…03 Wealth Adviser Awards 2016 results

04 Wealth advisers adapt in the face of challengeBy Beverly Chandler

07 Quilter Cheviot Investment ManagementBest Wealth Manager – Charities

09 St. James’s Place Wealth ManagementBest Private Client Investment Manager

10 Octopus InvestmentsBest Investment Product Provider

12 Third Financial SoftwareBest Technology Provider – Transaction Processing

14 WHIreland Wealth Management Best International Clients Team

15 Tatton Investment ManagementBest Boutique Wealth Manager

AWARDS 2016

WEALTH ADVISER AWARDS Special Report May 2016 www.wealthadviser.co | 3

RESULTS

AWARDS 2016 The winners

The Wealth Adviser Awards 2016 were determined by the votes of Wealth Adviser’s readers, who include wealth managers, IFAs, fund managers, family offices, law firms, accounting firms and other industry professionals.

The winners of the Wealth Adviser Awards 2016 are:

Best Domestic Clients TeamLondon & Capital

Best International Clients TeamWHIreland Isle of Man

Best HNW TeamKillik & Co

Best UHNW Team (including private investment offices)Sand Aire

Best Wealth Planning TeamBordier & Cie (UK) PLC

Best Boutique Wealth ManagerTatton Investment Management

Best Private Client Investment ManagerSt. James's Place Wealth Management

Best Investment Product ProviderOctopus Investments Limited

Best Wealth Manager – CharitiesQuilter Cheviot

Best Wealth Manager – Balanced PortfolioAlpha Portfolio Management

Best Wealth Manager – Growth PortfolioSaltus Investment Managers

Best Wealth Manager – Income PortfoliosLondon & Capital

Best Wealth Manager – Alternative InvestmentsAlpha Portfolio Management

Best Multi-Family OfficeOracle Capital Group

Best Technology Marketing CampaignRare Consultancy for Wealth Dynamix (WDX)

Best Brand LaunchSmith & Williamson

Best Private Client Legal TeamBircham Dyson Bell

Best Tax & Accountancy TeamMoore Stephens

Best Property AdviserW. Coleman & Co

Best Trust TeamLondon & Capital

Best Technology Provider – Front OfficeWDX (Wealth Dynamix)

Best Technology Provider – Transaction ProcessingThird Financial Software

Best International Wealth Management CentreGuernsey Finance

Best Wealth Adviser Personality of the YearPaul Killik

WEALTH ADVISER AWARDS Special Report May 2016 www.wealthadviser.co | 4

and we look at the decrease in demand for smoking products. We allow clients to do what they want and to do it properly.”

Wealth advisers and independent financial advisors face increasing challenges at the moment, from the markets to the very structure of their businesses.

The latest Fidelity Advisor Investment Pulse study found that in the first quarter of this year, financial advisers are most concerned about market volatility, with nearly 30 per cent of advisors citing it as an area of focus, a significant rise from less than 20 per cent in the previous quarter.

The second biggest concern was in portfolio management with Fidelity commenting that it is important for advisors to focus on what they can control. “This starts by helping clients look at longer-term horizons, and by having a plan to invest through market fluctuations,” the firm said.

Portfolio fears among advisers are understandable given the issues that face the sector. And the situation is not eased by the fact that many individual investors are no clearer on their aims and hopes.

Speaking at the Friday 13th May Wealth Adviser Awards lunch, held at The Reform Club in Pall Mall, Gemma Woodward, director of Socially Responsible Investment (SRI) at Quilter Cheviot, commented that on her appointment, most people asked: “Were we investing irresponsibly before?”

The rising importance of SRI and Environmental Social Governance (ESG ) approaches to investing has led to what Woodward called, “a bit of an alphabet soup”.

“Our definition is that we are integrating ESG concerns into the investment process,” she said, “not wearing hair shirts but improving our investment approach as a whole. More than ESG and SRI, we look at all the factors that impact investor concerns.”

In her speech, Woodward mentioned Volkswagen, a stock that scored well on all the metrics but has been embroiled in a lengthy emissions scandal.

“We do risk mitigation,” she said. “We ask ‘where are the risks?’ and look at anything a company is facing as an issue. So with a tobacco company, we ask how much water does tobacco use in the light of water scarcity

Wealth advisers adapt in the face of challenge

By Beverly Chandler

OVERV I EW

WEALTH ADVISER AWARDS Special Report May 2016 www.wealthadviser.co | 5

Recent research from SyndicateRoom, the equity crowdfunding investor platform, finds that equity investment needs to be simplified to attract individuals. The survey found that Britain is a nation of savers and investors, with over half of respondents saying that if they were given GBP10,000, they would either save it or invest it.

Some 22 per cent of respondents said they would spend the money and 17 per cent said they would use the money to pay off debt. While the average UK adult now has around GBP173,000 in personal assets, the majority of those who could be motivated to invest in equities have been put off because they cannot find a simple and easy way to do so.

The survey found that everyday investors

are attracted to public markets, but awareness is low. More than half (53 per cent) believe their net worth would increase if they invested in equities. Furthermore, 40 per cent said that they would have invested in some IPOs had they known about them. In addition, SyndicateRoom has identified that 15 per cent of the UK population has never invested in an IPO but have the ability and desire to do so.

With three-quarters of individuals surveyed believing that they are better off looking after their own personal finances, rather than using a financial advisor or wealth manager, the public equity markets are missing out on a vital source of retail investment demand, the company says, also highlighting 11

OVERV I EW

Belfast Birmingham Bristol Dublin Edinburgh Glasgow Jersey Leicester Liverpool London Manchester North Wales Salisbury

Quilter Cheviot Limited is authorised and regulated by the Financial Conduct Authority.

WHEN IT COMES TO INVESTMENT, WE HELP CHARITIES BY THINKING BEYOND THE OBVIOUS.

CALL WILLIAM REID HEAD OF CHARITIES

TEL. (0)20 7150 4200 OR VISIT WWW.QUILTERCHEVIOT.COM

BEING BROAD-MINDED WIDENS HORIZONS.

OS005707_QC_Ad_Wealth_Advisor_Awards_297x210[2].indd 1 19/05/2016 09:50

WEALTH ADVISER AWARDS Special Report May 2016 www.wealthadviser.co | 7

QU ILTER CHEV IOT INVESTMENT MANAGEMENT

Quilter CheviotBest Wealth Manager – Charities

William Reid is head of the Charities Team at Quilter Cheviot, managing GBP1.4 billion on behalf of 640 charities. The current team, comprising a central team of ten in London, and 12 regional charity offices, including offices in Edinburgh, Belfast, Dublin and Jersey, has evolved through Quilter Cheviot’s corporate merger past from its original outpost at Laing & Cruikshank.

The Quilter Cheviot team has won best wealth manager – charities and can through its corporate history claim that it has been helping charities since 1771. Reid explains that their administrative strength is crucial for charities. “When you survey the people who use you, administration is up there as the most important, almost before performance,” he says.

“Another key is that our clients have direct access to the team rather than a barrier of relationship managers in the way. We three investment directors are fund managers and the first point of contact. People know they can ring us and ask what we’ve done and we know what we’ve done because we did it.”

The firm represents a broad variety of charities. Roughly 30 per cent are represented by general grant makers and endowments who give money to anything from youth to education; 25 per cent are in the education sector, representing university colleges or schools or organisations trying to further education in the broader sense.

After that, at about 18 per cent, comes religious activities with Quilter Cheviot representing a number of religious orders across the spectrum of religions. Finally, social care and development/culture and recreation accounts for about 17 per cent.

The sector famously has a number of restrictions on where it can invest. “A little under a quarter of our charities has some form of ethical policy which requires a restriction in investment,” Reid explains. “Most common is no tobacco, but we also have restrictions on armaments, alcohol and, particularly in education, gambling.”

“You have to put ethics first which can prove a challenge but nowadays where there is a requirement to be broadly diversified for everyone it isn’t necessarily the challenge it used to be.”

Reid explains that while one of his charities doesn’t have much left to invest in after the ethical requirements have been fulfilled, he has to make the trustees aware of the implications of the restrictions.

“On some screens, Walmart in the US comes up as a firearms supplier because you can buy a hand gun there in the States. It has to be a workable policy and that the trustees understand their ethical policy for their charity,” Reid says, citing the 1991 Bishop of Oxford’s case that established the idea of socially responsible investing. “A charity running a care home might avoid alcohol and armaments but the residents in the care home might drink or be ex-military so the policy might not apply.”

The large team of regional offices features all the different charity jurisdictions around the UK and in Ireland, giving the firm local expertise.

“If you walk into the Leicester or Birmingham office you will get the expertise and advice from the whole group,” Reid says. “And a vast majority of members of the team at investment director level are themselves trustees or advisers to charities so also sit on the other side of the table.”

Charities as a whole only receive 8-10 per cent of their income from investments, and while the overall level of income into charities has been consistent over the last five years, fundraising and donations have been declining.

“Individuals remain crucial but there are increased requirements for charities to produce impact reports on what affect the money will have – what difference does it make? What you are finding in today’s philanthropists is that they want to understand better the causes of the problem they want to help.” n

William Reid, head of the Charities Team at Quilter Cheviot

The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

At St. James’s Place we are delighted and proud to receive the 2016 Best Private Client InvestmentManager Award from readers of Wealth Adviser

Our relationship-based advice service means that we are committed to helping our clients manage their wealth in a way which reflects their personal circumstances.

The advice we provide to individuals, trustees and businesses ranges from investment planning through to tax planning, helping our clients grow and protect their wealth.

If you would like to find out more about our award-winning service, contact us to request a copy of our complimentary ‘Guide to Wealth Management’.

0800 0138 137 www.sjp.co.uk

Putting clients at the centre of everything we do is core to our culture

The ‘St. James’s Place Partnership’ and the titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives.Members of the St. James’s Place Partnership in the UK represent St. James’s Place Wealth Management plc, which is authorised and regulated by the Financial Conduct Authority.

St. James’s Place Wealth Management plc Registered Office: St. James’s Place House, 1 Tetbury Road, Cirencester, Gloucestershire, GL7 1FP, United Kingdom.Registered in England Number 4113955.

AWARD WINNER 2016

WEALTH ADVISER AWARDS Special Report May 2016 www.wealthadviser.co | 9

ST. JAMES ’S PLACE WEALTH MANAGEMENT

St. James’s Place Wealth Management

Best Private Client Investment Manager

St. James’s Place, winner of this year’s Wealth Adviser award for best private client investment manager, has had another good year according to Iain Rayner, the firm’s Joint Chief Operating Officer.

Famously, the firm’s business model is to use a network of self-employed wealth managers and financial advisers who the firm refers to as ‘partners’. This number has gone up to over 3,000 over 2015.

“We like to think that the way we run the business makes it the best place for financial advisers to run their business from in the UK,” Rayner says. He reports that new partners are joining them from other institutions and also increasingly represent second careerists, for whom they provide academy programmes and training.

“The second careerists are often moving over from being lawyers or accountants, or we get ex-military people, all in their 30s or early 40s and looking for something different. We look for people with the right kind of skill set and approach and put them through their exams.”

St. James’s Place now has academies in Edinburgh, Birmingham, Manchester and London.

In terms of investment offering, St. James’s Place’s investment management approach is to select the very best external fund managers from across the globe that they then monitor on a continuous basis and can change if the need arises. Their fund range totals 35 at the moment, comprising 65 lead fund managers and 16 strategies which are exclusive to individual UK investors; turnover can be three or four changes in a year. “We make changes to the fund range if managers reach their optimal capacity, or if we feel that the expectation for future performance isn’t what

it needs to be or there have been changes in personnel or investment approach,” Rayner explains.

“Our clients tend to invest with us over the medium to long term,” Rayner says. “80 per cent of our funds, over a five year period, have beaten the benchmarks we set and 81 per cent over ten years and in absolute terms, while the FTSE 100 didn’t have a great year in 2015, our investment management approach worked pretty well, thanks to diversification across a broad range of asset classes and investment styles.”

2015 saw the firm buy Bristol based wealth manager and private client stockbroker Rowan Dartington. Rayner believes that the traditional attitude of the stockbroker and discretionary fund manager works well for the firm’s more affluent client base.

The firm is also opening its first new office in 15 years, in London’s Canary Wharf and has expanded its relationship with Metro Bank. New products allow St. James’s Place clients to borrow against their portfolios and the firm is developing some inter-generational mortgage products.

“Inter-generational is a big theme in our business,” Rayner says. “Traditionally we have found that our clients are very concerned about inheritance tax planning and those trends are changing quite quickly. We have a baby boomer generation which is more affluent, with people who have done well in terms of pension provision and property value growth and so on, but then there are some interesting trends of people living longer and increasingly thinking about nursing home fees for themselves but also looking to pay for their grandchildren’s education and helping them get on the property ladder. Financial planning priorities are changing.” n

Iain Rayner, Joint Chief Operating Officer, St. James’s Place Wealth Management

WEALTH ADVISER AWARDS Special Report May 2016 www.wealthadviser.co | 10

Octopus InvestmentsBest Investment Product Provider

“The reaction from wealth managers has been fantastic” Rogerson says. “It delivers a 5-6 per cent income to investors, safe in the knowledge that our balance sheet will be hit first if any of the loans don’t perform”

The healthcare infrastructure platform funds care homes, special needs’ schools, and GP surgeries all of which need upgrading, and whose returns Rogerson describes as ‘boringly predictable’ – this investment is offered through two limited partnerships run on behalf of larger wealth managers and institutions and also through the MedicX Investment Trust.

The ventures investment platform, which manages GBP500 million, offers venture capital trusts – now considered a genuine alternative to pensions – and has backed Secret Escapes, Zoopla and Swiftkey from start up.

Rogerson points at an evolution in the wealth management industry as a driver for their success.

“The biggest change with wealth advisers is that, over the last few years, they have moved towards financial planning as a core part of their proposition, where previously they were focused purely on the investment proposition,” Rogerson says.

“We offer two things. First, a series of products with tax wrappers around them that solve problems their clients face, whether it’s income tax mitigation, capital gains tax deferral or inheritance tax mitigation. Secondly, we give them the confidence that the asset classes we invest in are going to do what we say they will.” n

Fund management pedigree lies behind the foundation in 2000 of Octopus Investments, with a little dash of a product famously designed to do what it says on the tin.

Simon Rogerson, Chris Hulatt and Guy Myles, formerly fund managers at Mercury Asset Management, founded the firm, which has won Best Investment Product Provider, to create new types of investment, ones that come with the Ronseal promise.

CEO Rogerson says: “The traditional approach at fund management firms is to design one of everything, so you have dozens or even hundreds of funds covering all equity markets. They then promote the small number of funds which have the best short-term track records – like technology funds in 2000, or commercial property funds in 2006. This rarely turns out to be in the customer’s best interests.”

“The asset classes we invest in must all pass our Ronseal test. Our clients buy a product with the implicit promise that it will do what it says it’s going to do and we try to align our fees with that promise.”

Since foundation in 2000, Octopus has grown to manage GBP6 billion, have over 500 staff and some 70,000 clients. The business comes in from wealth managers and independent financial advisers and the firm is increasingly developing an institutional business with GBP2 billion now under management for institutional investors.

The key investment platforms the company has built are renewable energy, property finance, healthcare infrastructure, multi manager and smaller company investment. As an example, the firm’s Property Bridge Finance business has lent GBP2 billion to property developers in the residential and commercial space and is generating returns of between 7 and 12 percent per annum, with negligible capital losses. The company has recently launched a P2P offering in this space – Octopus Choice – focused entirely on its own property finance deal flow and with the Octopus balance sheet in first loss position.

Simon Rogerson, CEO, Octopus Investments

OCTOPUS INVESTMENTS

WEALTH ADVISER AWARDS Special Report May 2016 www.wealthadviser.co | 11

OVERV I EW

16

a big issue for our wealth adviser and IFA audience.

Among the winners in the Wealth Adviser awards are firms that have taken on these concerns directly and who are offering a different approach to the industry. A new winner for us is Octopus Investments, with its Ronseal promise approach to investment products.

Founder and CEO Simon Rogerson says: “Our clients buy a product with the implicit promise that it will do what it says it’s going to do and we try to align our fees with that promise.” The key investment platforms the company has built are renewable energy, property finance, healthcare infrastructure, multi manager and smaller company investment.

Another new firm is Tatton Investment Management, which was founded just three years ago and has raised assets under management to GBP2.75 million in that time.

Funded by the Paradigm Group, a distribution and independent financial adviser (IFA) support company, but an independent standalone firm, Tatton offers investment management services to the IFA community, offering a range of model portfolios benchmarked against the Morningstar range of model portfolios.

CEO and CIO Lothar Mentel says that there is a recognition that model portfolios on platforms are better for IFAs, taking the operational overheads away, and saving the IFA time and risk exposure.

5

WEALTH ADVISER AWARDS Special Report May 2016 www.wealthadviser.co | 12

Third Financial SoftwareBest Technology Provider – Transaction Processing

Third Financial Software has enjoyed another record year of growth, reports chief executive Stewart Foster, and has almost doubled in size. Founded in 2008, Third Financial has gone from simple software to offering a software platform business and is now looking at the direct to consumer market.

The platform business is headed by Matt Aylward, ex-Brooks Macdonald, and designed to look after clients who outsource their back office. The new business unit focusing on the D2C market is headed up by founding director Pete Caddick.

The firm has won the award for transaction processing. “We were a front and middle office vendor to the UK wealth management market in 2011 and then built a back office team and the idea was that the one piece of technology would look after clients from front to back office,” Foster says. “There are a growing number of clients who use us as a transaction processing engine and that is the technology that will drive the platform business.”

Foster is observing consolidation within the industry and believes it will continue.

“But people tend to forget that the number of clients is about the same because despite all the high profile consolidations there are a mass of start-ups every year. It’s very much a business that does a good job of reinventing itself with constant renewal and change,” Foster says.

He believes that the industry’s development has been driven by end client demand. “Fundamentally what happens is that firms start and then they get big and the service gets less personal and then the senior members go off and set up a boutique offering a more personal service again. It’s a cycle that is going on as the market does a good job of renewal and it will continue,” he says. “And the renewals are in a slightly different form – last year we mentioned the direct consumer approach which is gathering significant momentum with a raft of new entrants into that market.”

Foster sees the rise of so-called robo-adviser firms, different from traditional wealth management firms, and believes they are still evolving as consumer demand evolves.

“We have a number of clients in this direct to consumer or self-adviser sector – we see it as an exciting growth area,” he says.

“Internally we decided to invest GBP1.5 million into a new tech suite specifically aimed at direct to consumer market which will be the third and final leg in our strategy,” Foster says. “The sector will attract billions of money over the next decade and we want to compliment what we have and get part of that new market space. We are working on it now and the first version will be ready in the fourth quarter of this year.”

The direct to consumer project is currently named Xing and Foster believes that every major wealth manager will offer this type of offering over the next five years to complement their existing business. The plan is that Xing will be available to software and platform clients going forward. n

Stewart Foster, Chief Executive, Third Financial Software

TH IRD F INANC IAL SOFTWARE

Roxanne Afzali collects the award from Beverly Chandler

To find out how we can make a difference for you and your clients, speak to David Bushe or Gary Colley today.

+44 (0)1624 602020

enquiries@whirelandwm.com

Understanding the requirements of our international advisers, and helping them maximise their clients’ returns, takes a highly skilled and focused team.

It would appear that others recognise that importance as well.

Together,we achieve.

WHIreland comprises WH Ireland Limited and WH Ireland (IOM) Limited which are wholly owned subsidiaries of WH Ireland Group plc. WH Ireland Limited is authorised and regulated in the UK by the Financial Conduct Authority, is registered in England and Wales with company number 02002044 and is a member of the London Stock Exchange. In the Isle of Man, WHIreland and WHIreland Wealth Management are registered trading names of WH Ireland (IOM) Limited which is licensed by the Isle of Man Financial Services Authority.

WM1169MAY16SW

Born in the 1800’s, William Henry Ireland founded the firm. Today, WHIreland Wealth Management provides investment services from a regional presence across the UK and internationally from the Isle of Man to a diverse range of clients and advisers. We are quoted on the London market and have c.£2.5bn of assets under management or influence.

www.whirelandwm.com

WM1169MAY16SW WHIreland Wealth Advisor Award A4 Advert.indd 1 12/05/2016 09:28:54

WEALTH ADVISER AWARDS Special Report May 2016 www.wealthadviser.co | 14

WHIreland Wealth Management

Best International Clients Team

David Bushe, WHIreland Wealth Management

Will Corrin, WHIreland Wealth Management

discretionary portfolios, with the average client portfolio size in excess of GBP500,000.

The Isle of Man team is made up of an investment management team consisting investment managers and administrative support, a Compliance function and part of the WHIreland Group Marketing Team who are focused on providing strategic support to the international and UK businesses.

“We have a very experienced team based in the Isle of Man and we aspire to be a leading international wealth manager where service and performance is at the core of what we do,” Bushe says. He continues, “The coming years will see us continuing to strategically build our international wealth management services and develop key international distribution partnerships.” n

AIM-listed wealth manager WHIreland went against the tide in 2013 when it launched and based its international presence in the Isle of Man. The wholly owned subsidiary of WHIreland Group plc licensed in 2014, has won ‘Best International Clients Team’ in the 2016 Wealth Adviser Awards.

David Bushe, Director and Investment Manager of the Isle of Man business, explains that WHIreland’s international offering is designed to combine all the benefits of superior client service with all the advantages of investing in a highly rated and regulated top-tier International Business Centre (IBC).

Headed by Will Corrin, Managing Director of the Isle of Man business, the eight strong Isle of Man team has had a hugely successful first two years which has culminated in excellent growth in its local and international client base, having contributed to a significant growth in the Group’s discretionary assets under management. The firm has also widened its international distribution channels and has formed a number of strategic partnerships. This has seen the Isle of Man based team grow significantly during this time.

Corrin says: “This is an exciting time in our strategic development of accelerating the growth of our discretionary assets under management, but we’re operating in a crowded marketplace and our investment performance and the team’s commitment to high levels of service has won us this award”.

WHIreland is a long-established, London listed financial services firm that has a regional presence across the UK. Prior to the establishment of the Isle of Man business, the firm had no international presence and today, its clients range from a minimum of GBP250,000 upwards, across multi-currency

WHIRELAND WEALTH MANAGEMENT

David Bushe collects the award from Beverly Chandler

WEALTH ADVISER AWARDS Special Report May 2016 www.wealthadviser.co | 15

TATTON INVESTMENT MANAGEMENT

Tatton Investment Management was founded just three years ago and has raised assets under management to GBP2.75 billion in that time. Founded with support from the Paradigm Group, a compliance support company to individually FCA authorised adviser firms, Tatton is an independent standalone firm that offers platform based investment management services to the IFA community.

CEO and CIO, Lothar Mentel, explains that they have focused on the IFA community, offering a range of model portfolios, benchmarked against the Morningstar/OBSR range of model portfolios.

“There is a recognition that model portfolios on platforms generate better results for IFAs and their clients,” Mentel says, “But it brings in a considerable level of operational overheads and risks for them. We realised that we could significantly improve platform based investments through discretionary management mandates which takes the operational overheads away, saving advisers’ time and risk exposure and making their clients happier.”

Tatton’s overlay management approach for risk profiled model portfolios is based on three core elements.

Mentel says: “Rebalancing back to target weights is key for platform portfolios and we do this when necessary or opportune, rather than by calendar period, which is both rigid and arbitrary. In multi asset investments, this prevents portfolios drift away from the risk-return limits a client has signed up to and thereby avoids exposing investors to unintended risks.”

The second distinguishing element for Tatton is that they aim to avoid temporarily over-valued asset classes. “Individual asset classes can at times become overly fashionable,” he says. “Rather than trying to identify and ‘bet’ on asset classes which are perceived to generate above average returns in the future we focus our attention

on those elements of a portfolio’s strategic asset allocation which have the potential to negatively surprise in the near future.”

The third extra element of their overlay management approach is that they dynamically manage and adjust the allocation to the best of breed funds with which each portfolio populates the asset classes as prescribed by the risk profile.

“We aim to populate our portfolios with some different funds from the benchmark where we have conviction that they will be better suited to add value in the prevalent market environment,” Mentel says. “Just like stock pickers, our approach to fund allocation is focused on knowing during what periods in the market cycle our selected managers will have a better ability to outperform their asset class universe or – not be at the top of their game. By weighing our assessment of the market cycle position against our knowledge of a fund manager’s likelihood to succeed in this environment we will be over or under weighting or in the extreme divesting. This allows our chosen fund manager mix to outperform markets, even if in aggregate, all active managers taken together have been observed not to.”

The result is that Tatton’s model portfolios are far more actively managed than standard model portfolios which might only be rebalanced and adjusted once a quarter or year. What has been another driver of Tatton’s success has been that – by industry standards – the firm charges a comparatively low 0.15 to 0.24 per cent (incl. VAT) for running portfolios on a discretionary basis for its IFA clients.

“Having achieved critical mass and a threeyear track record, IFAs are now coming to find us. Initially our advantage was being co-funded by Paradigm but now we are receiving more interest beyond the Paradigm group of advisers and attracting advisers from all over the country.” n

Tatton Investment Management

Best Boutique Wealth Manager

Lothar Mentel, CEO and CIO, Tatton Investment Management

WEALTH ADVISER AWARDS Special Report May 2016 www.wealthadviser.co | 16

A regular winner in our awards is St. James’s Place, which has a network of wealth adviser partners around the country. The firm has won best private client investment manager in this year’s awards, and its partner numbers have increased to over 3,000 over 2015. The firm has developed a range of new products which allow St. James’s Place clients to borrow against their portfolios, and the firm is also developing some inter-generational mortgage products.

In an interview for our Wealth Adviser Special Report, Iain Rayner, the firm’s Joint Chief Operating Officer, comments that inter-generational products and investing have become a big theme in the firm’s business.

Financial planning priorities are changing,

Rayner says. “Traditionally we have found that our clients are very concerned about inheritance tax planning and those trends are changing quite quickly. We have a baby boomer generation which is more affluent, with people who have done well in terms of pension provision and property value growth and so on, but then there are some interesting trends of people living longer and increasingly thinking about nursing home fees for themselves but also looking to pay for their grandchildren’s education and helping them get on the property ladder.”

Whatever stage in life the investor is at, it is clear from Wealth Adviser’s 2016 awards that they need and can get access to sound financial advice. n

11

OVERV I EW