Delivering clients’ long-term financial goals is the clear focus at OCM Wealth Management. Where recent investment and growth has sealed the firm’s position as one of the largest Chartered Independent Financial Advisory (IFA) and Discretionary Fund Management (DFM) firms in the county, with a growing national reputation. They are fast becoming the DFM of choice, for modern financial planners, due to their integrated IFA / FA solution.
Founded 10 years ago by CEO Jason Stather-Lodge, the company prides itself on offering a connected IFA / DFM client solution. According to Jason “if you are an IFA working hard to determine what annualised return a client needs to deliver their planned dreams; you need an investment solution which is focussed on achieving that specific outcome. We have created, and spent the last decade refining, this exact solution; putting the client’s first, and in doing so we have been successful across all market conditions”
OCM’s priorities when managing client’s assets are:-
1. To deliver the client agreed annualised return, or outcome
2. To protect capital in line with indicative acceptable levels of loss and volatility
3. To beat an agreed benchmark
4. To beat the market return
OCM call this strategy Outcome Based Investing (OBI) and what makes OBI different is that it focusses on delivering what the client’s need, with regards to the annualised return; truly connecting the advisors and clients plan with an investment strategy.
OCM are different because instead of putting a client into one portfolio, based on traditional risk profiling, they integrate their own risk profiling and advising techniques into partner firms. As a result they blend clients across model portfolios based upon the lead advisers’ direction, considering the outcome required and acceptable risk tolerances
OCM make decisions based on their interpretation of: future risk, charting, momentum, economic analysis, volatility and required returns, which they call Quantamental Analysis. The result is a conviction led decision, based upon expected future returns and volatility on varying time horizons, being 3, 6 and 12 months.
OCM has a range of portfolios. Each has a specific focus for outcome and acceptable indicative capital losses or price volatility. Therefore if OCM believe risk is off and volatility is low, they will invest a client in a more aggressive portfolio. If risk is on and volatility high they will secure profits and invest a client in a less aggressive portfolio. All portfolios have the ability to go to 0% equity in times of high market risk or uncertainty, to protect value and ensure clients dreams are not obliterated by being focussed on the wrong priority.
OCM Centralised Investment Proposition
OBI is a Centralised Investment Process that challenges the assumption of Modern Portfolio Theory; that you cannot make strategically timed asset allocation decisions, and that all investors are better off buying and holding a fixed portfolio of assets, rebalanced at fixed points.
The view at OCM is that you can make strategic allocation decisions, by cyclically adjusting the asset allocation model, not necessarily timing the markets, but ensuring that the client is in the right asset at the right time. This is true of stockbroking and true of asset management so you should use both active and passive styles and blend different managers as the economic environment moves through its phases.
This is only half the story though, and no different to what many Multi Asset Managers are doing day to day. Therefore in addition to cyclically adjusting the portfolio another aim of OBI is to try and avoid the really bad years or negative significant market events. As a result the average annualised return (mean) increases. In addition the range of returns, on an annualised basis, is narrowed so for example instead of being between -20% to + 30%, it will be between -10% and + 25%.
Internally OCM call the effect of the decisions they make “Shift & Squeeze”; i.e. “Shift the Mean and Squeeze the Range”. The benefit to clients is that historically they have significantly reduced the volatility and enhanced the returns. By focussing on the outcome and capital protection primarily, rather than trying to beat the market, they have historically provided more stable returns when compared to many of their competitors.
Jason Stather-Lodge, Chief Investment Officer and architect of this theory, said:
“What we do differently is that we believe all client portfolios should be cyclically adjusted into assets that are aligned, in our Investment Committee’s opinion, to provide the greatest likelihood of adding a positive contribution in the coming quarter. It is a team operation that is highly conviction led and focussed on providing the clients outcome first and protecting against significant market events second, and then beating benchmarks. This makes the proposition extremely compliant and in line with FCA mandate as regards to ensuring the client is in the rights assets at the right time.”
The key, according to OCM, is to limit the surprises and capture as much of the upside as possible, with a focus on the intended outcome, and as such, smooth the returns.
Who is it for?
As a stand alone DFM solution, developed by an IFA for IFA’s, it is part of a holistic approach that connects the benefits of cash flow modelling with an investment solution.
The DFM solution is embedded into the partner firm to seamlessly connect that firms’ advisory processes to the asset management service and is extremely regulatory friendly and TCF focussed. Ensuring that a firm benefits fully from the economy of scale, the solution and underlying service delivery.
The benefit of the solution is that it is tailored to deliver the clients agreed objectives as the primary focus, as agreed by any modern financial planner.
OCM has offices in London, Milton Keynes and Northampton. If you would like to understand more or have an in-formal discussion please ring on
0845 338 1971 or alternatively go to
www.ocmwealthmanagement.co.uk
