Having already successfully hired in expertise, Mr Mannix is not shy about the possibility of recruiting further teams and expanding the firm’s capabilities.
“Our ongoing ability to recruit world-class capabilities is higher than it has ever been, and at a time when many of the traditional active managers are doing a great job of disenfranchising their investment teams by underpaying them and telling them they’re going to be replaced by computers,” he says.
“That creates the most fabulous opportunity for us to bring in additional investment teams that are doing something different, sustainable and with a clear value proposition.”
He notes the firm is not “trying to cover the waterfront”. Instead, he says RWC is focused on “specific investment expertise in areas where there is a clear value to the adviser of accessing that expertise”. He highlights the increased focus on cost and value, especially in the wake of the FCA’s asset management market study.
“There probably is no bottom to how far prices will fall to provide simple vanilla access,” he says. “[But] if you want to have exposure to a competency and process that has limited capacity, then the value proposition is totally different. It is a function of the amount of capacity and the value it will add, and it is limited by the amount of money that can be allocated to that strategy.”
Mr Mannix points out that in many areas the industry has “been earning excessive amounts of money because they have taken more money than is realistically possible to allocate to those strategies”, adding: “You end up becoming much more benchmark-aware, for two reasons. One, you can’t access in the volume that you need, the things you really want to access. Second, you become very risk-averse and as long as you are within a reasonable range of the index return, then a significant amount of money will not move.”
He adds: “I think that cheap or premium is not the point at all. The thinking is you should be paying rock-bottom prices for investments irrespective of what they do, and that’s not correct. The savings industry has a fantastic habit of allocating significant amounts of money and moving the consumer’s behaviour towards what is hot and easy to sell. Because of the profile that fees are getting from the regulator and media, the easy sell at the moment is cheap.”
He continues: “Do I think its helping that there is fee competition? The answer is yes. But do I think it is right that decisions should be made on price? The answer is no, they need to be seen in the context of other decisions being made.