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