A bal­anced approach

Choos­ing the right amount of risk is the key to build­ing a suc­cess­ful in­vest­ment port­fo­lio for clients, writes An­thony Har­ring­ton

The Herald Business - - Advertising Feature -

RENS­BURG Shep­pards is a ma­jor UK in­de­pen­dent private client stock­broking and in­vest­ment man­age­ment com­pany, man­ag­ing over £13bn of as­sets across 10 off ices in the UK. Clients in­clude private clients, char­i­ties, trusts and pen­sion funds.

As Stu­art Light, a di­vi­sional di­rec­tor with the firm’s Glas­gow of­fice ex­plains, the firm has built its rep­u­ta­tion on pro­vid­ing a range of be­spoke, per­son­alised ser­vices for its clients, and on main­tain­ing close con­tact be­tween clients and their in­vest­ment man­agers.

“Each client has a per­sonal in­vest­ment man­ager who is backed by a team of in­vest­ment pro­fes­sion­als,” Light says. The firm of­fers three broad in­vest­ment strate­gies, based on the in­dus­try ac­cepted “norms” of a bal­anced port­fo­lio, a cap­i­tal growth port­fo­lio and an in­come port­fo­lio.

“The first thing we do with any client is to carry out a thor­ough fact find which means that we un­der­stand both the client’s fi­nan­cial re­quire­ments and their in­vest­ment goals in de­tail,” Light says. On the ba­sis of this, and tak­ing into ac­count the client’s ap­petite for risk, the in­vest­ment man­ager will draw up a be­spoke port­fo­lio for each client.

The firm pro­vides both ad­vi­sory port­fo­lio man­age­ment and dis­cre­tionary port­fo­lio man­age­ment. The pre­ferred route is the lat­ter, since un­der a dis­cre­tionary approach, the in­vest­ment man­ager has full con­trol, af­ter es­tab­lish­ing the client’s ob­jec­tives and re­quire­ments. The im­por­tance of this is that mar­ket move­ments and op­por­tu­ni­ties oc­cur all the time and tak­ing ad­van­tage of th­ese op­por­tu­ni­ties can be dif­fi­cult if the client has to be con­tacted to ap­prove each trans­ac­tion. A dis­cre­tionary approach frees the in­vest­ment man­ager to run a di­ver­si­fied port­fo­lio de­signed to meet the pre­cise re­quire­ments of the clients.

The firm of­fers ei­ther a fee based approach, with a small ad­min­is­tra­tive charge for each trans­ac­tion, or a fee plus com­mis­sion approach.

“Our in­vest­ment team is able to draw on the re­search of our ded­i­cated re­search de­part­ment in Lon­don. Their anal­y­sis, to­gether with the views of our most ex­pe­ri­enced fund man­agers, pro­vide the ba­sis for de­ci­sions about as­set al­lo­ca­tion (as be­tween shares, bonds, cash and other in­vest­ments), about the pro­por­tion to be in­vested in dif­fer­ent global re­gions, and in the de­tailed con­struc­tion of each port­fo­lio,” says Light.

Eq­uity in­vest­ment is likely to play a fun­da­men­tal part in all our port­fo­lio strate­gies, though the vol­ume al­lo­cated to UK and to over­seas eq­ui­ties will vary ac­cord­ing to both the strat­egy adopted and the risk profile of the client,” Light says.

Eq­uity in­vest­ments, of course, are a medium to long-term strat­egy. The firm fo­cuses on the FTSE 100 for client hold­ings and uses col­lec­tive ve­hi­cles to get ex­po­sure, where re­quired, to the FTSE 250 and smaller com­pa­nies. Lower risk in­vest­ments such as bonds and tax ef­fi­cient al­ter­na­tives such as PEPs, ISAs and in­sur­ance re­lated prod­ucts all have their part to play.

“The aim of our in­vest­ment process is to buy the right in­vest­ments, in the right pro­por­tions and at the right time for each client’s dif­fer­ing re­quire­ments,” Light says.

One of the strengths of the ser­vice, he ar­gues, is the de­tailed anal­y­sis that is car­ried out of each client’s fi­nan­cial af­fairs, so that the in­vest­ment ad­viser can give the client ad­vice across the full spec­trum of fi­nan­cial plan­ning. This in­cludes in­her­i­tance tax, re­tire­ment plan­ning and pen­sions, life as­sur­ance and off­shore in­vest­ments.

“One of the things that dif­fer­en­ti­ates us from other stock broking and fi­nan­cial ser­vices f irms is that we aim to give a highly per­son­alised ser­vice. Clients know that they are wel­come to call us and our in­vest­ment man­agers are al­ways happy to an­swer any queries clients might have about their port­fo­lios or their af­fairs. Clients re­ceive reg­u­lar val­u­a­tions and a com­pre­hen­sive in­vest­ment re­port at the end of each tax year,” he com­ments.

Per­sonal touch: Stu­art Light says funds are picked to meet in­di­vid­u­als’ own needs

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