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Reelin’ in the years: Adviser Case Study -UNIQ Family Wealth

  • By Jason Stockwell

Marlene Outrim reflects on the changing face of investment management within advisory firms over the years and why she believes that outsourcing is the best option for her clients and her financial planning firm

Over the many years that I have been giving advice to clients on investments, my team and I have applied numerous different approaches, systems and processes to matters of investment management.

Just like so many other advisers did way back when, at outset our skills were deployed in selecting what we thought were the best performing funds for our clients from the fund performance tables in Money Management magazine. Things developed on from that to a simple form of asset allocation that was tailored somehow to the client’s risk profile (mainly measured on a scale of 1 to 7, with one being extremely cautious and seven highly risky, but with no explanation as to what that really entailed). And all of this whilst still using those resourceful Money Management performance tables of course!

After a while, we realised that although we were always telling our clients that past performance was not a guide to the future, this was exactly what we were relying on ourselves in order to build investment portfolios.

Realising that we lacked the expertise of being able to consistently select the most appropriate funds and fund managers, we thought it sensible that we should rely on those firms and individuals who did have the requisite knowledge and experience to do so.

Since then, we have used a variety of approaches including multi-manager funds, multi-asset, model portfolios, discretionary managed portfolios and a mix-and-match of all of these. Occasionally we were aligning with funds – and occasionally with investment managers – who convinced us that their funds were the most appropriate for our clients.

The way forward

Five years ago, I set up UNIQ Family Wealth. By then, I had experienced such a variety of ways of building clients’ investment portfolios. Some were reasonably successful and some not so. I concluded that it was best for our clients if neither my team nor I should be devising their investment portfolios in-house.

Why it took me so long to realise this, I am not sure. It was probably because there was an expectation that as a financial adviser I probably should be able to advise on investment funds. After all, this had been part of everyday working life for some years.

The pivotal moment was when I finally realised that my most effective and efficient skills lay in being a financial planner, advising and guiding clients through the maze of financial information and how best to use it for and to achieve their objectives in life. My expertise lay in creating plans for our clients, coaching, educating and reassuring them that their actions were sound and also to sit tight when markets were volatile. This role was more akin to that of a personal Financial Director for those clients, ensuring that they had access to their money as and when they needed it, but also that they did not run out of it at some point in the future.

Reaching out

However, if we were not going to be carrying out the research necessary to deliver this investment advice, who then would be responsible for it? Certainly, we had no one else in the team to do it. Every single person was carrying out a specific role whether as a paraplanner, administrator, office manager or financial planner. Sure, several of us had achieved various investment qualifications over the years and had many years of experience and knowledge of the different types of investments. However, what we did not have was the detailed level of experience, back up support and advanced knowledge which most investment managers have. They work closely with a team of analysts, economists and researchers to conduct company research, monitor trends in markets, economics and investment performance, and make market predictions that guide business and individual investment decisions. Most of their working days are spent consulting, researching, compiling analysis, reading reports and accounts, interviewing fund managers & appraising companies. For me it therefore stands to reason that these are the people who are best equipped to provide the ongoing investment management services for our clients. Within our financial planning firm, we lacked the resources to have one person employed in such a capacity, never mind a whole team.

Nevertheless, we had a clear idea of what we wanted for our clients. This included portfolio rebalancing twice a year, and the ability for us to appraise any investment advice given, the types of investment that were being used, plus the fees and charges.

Identifying the right partner

We decided to obtain independent research to help us to determine which would be the best investment management firm to assist us in putting together tailored portfolios for our clients and at a reasonable cost.

Maybe it might have been easier for us to go to a number of different investment managers and use several portfolios and try to fit them each time with our clients’ requirements, but then again this also detracted from our financial planning role.

Independent research carried out by the lang cat revealed that there were very few investment managers who were prepared to provide such a service. JM Finn was one company managing portfolios on a discretionary basis, that had already embarked on this journey and were prepared to continue with a few quality advisers. It was a good fit for us.

How it works for us

Since then, we have worked closely with JM Finn and their investment managers who have devised a tailored portfolio service for our clients. They have aligned them to the Finametrica risk profiler that we use and produced seven core-satellite portfolios, consisting of 70% passive investments and 30% active. We give JM Finn the discretion to decide which are passive and which are active. The rebalancing takes place twice a year. Our investment committee meets on a quarterly basis with the investment managers. They provide us with a full market update, their detailed commentary and reports. They inform us of the meetings taken place with relevant fund managers, which funds need to be reviewed, dumped & their replacements.

We decided to obtain independent research to help us to determine which would be the best investment management firm to assist us in putting together tailored portfolios for our clients and at a reasonable cost

Whilst JM Finn was not a household name, it was established back in 1945 and has always focused on the provision of discretionary services. When working with financial planners, the company aims to provide investment services that are in line with the ethos and philosophy of the planning firm. This is to ensure that there is continuity between the high-level planning and underlying investment strategy, or portfolio, which is linked to that plan. It makes sense.

Minutes are kept of all our meetings with them and these are circulated to our team for discussion with clients. Further meetings are held nearer to the rebalancing periods. We remain in control of the client responsibility and would be free to disengage from JM Finn if we felt it necessary. To date, the relationship has worked well. Our clients are pleased with the performance and the overall approach and care that we are using in advising on their investments. Rather then feeling that we have opted out of a role, instead we know that we are working together with JM Finn in a way that frees us to develop closer relationships with our clients. Because of this, our skills are devolved in a more fruitful manner, giving clients the full financial planning service which they value and trust and which gives them the peace of mind to get on and live their lives with confidence that their financial affairs are being properly looked after and are in very good hands.

Rather then feeling that we have opted out of a role, instead we know that we are working together with JM Finn in a way that frees us to develop closer relationships with our clients

About Marlene Outrim

Marlene is the founder and Managing Director at UNIQ Family Wealth, a financial planning firm based in South Wales.

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