When it comes to managing money, good relationships are vital. Here, two of Charles Stanley’s Investment Managers explain the importance of their dealings with Independent Financial Advisers.
By Rebecca Stein, Investment Manager, Oxford
At Charles Stanley, we understand how important it is that advisers have the time to look after the personal and professional relationship with their clients. Outsourcing to a Discretionary Fund Manager helps give advisers extra time to focus on those relationships. As a trusted partner, we take over the responsibility of looking after the clients’ investments, operating within the parameters agreed with the adviser.
As the investment manager, we are responsible for the investment decisions and discussing the ongoing investment strategy with the financial adviser. We don’t outsource this aspect to relationship managers, as it is important that the person responsible for your client’s investments is accountable. The portfolio moves and adapts, not only with the investment landscape, but also in line with the client’s changing goals and needs from the investment portfolio.
We regularly complete a full review of the portfolio, which is always bespoke to the individual client’s requirements. This can be a useful milestone to ensure that we are still on course to meet the client’s financial goals. The asset allocation is reviewed, and so is the performance of the underlying investments. Market commentary is also provided, providing useful insights on our thinking for the portfolio strategy going forward.
To ensure that financial advisers always have their clients’ investment details on hand, some prefer that we notify them after each trade. This ensures the financial adviser has all the information needed to keep clients up to date with changes to the portfolio – including clear reasoning behind the decision at that time, and why this is suitable for the client. Increasingly, we are finding that outsourcing this aspect to an investment manager makes sense as it frees up the adviser’s valuable time.
The regularity of communication is entirely down to the financial adviser and their client – we can be in touch as little or as often as necessary. Some advisers prefer that we communicate solely with them, and others prefer that we have some direct contact with the underlying client. Whatever the preference, the reporting is tailored to the financial adviser and underlying client. We can produce investment performance and commentary information prior to meetings with the underlying client, or we are more than happy to be involved and come along to the meeting to discuss the investment element.
Costs are important to financial advisers, investment managers and clients. By creating a portfolio of direct equity investments, alongside a selection of collective investments to help increase diversification and reduce risk in certain areas, we can help keep overall portfolio costs down. We try to negotiate the lowest OCF (ongoing charges figure) possible with the fund houses. High fund costs can have the potential to drag on the performance of the investments, and it is something that we keep under constant review.