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Diary of an adviser: James Wade

Diary of an adviser: James Wade

Monday
First a client call. We are looking at using venture capital trusts (VCTs) as part of his overall investment portfolio and, having gone to a presentation I co-hosted for him last week, he is interested in discussing this further.

For the right client, building a stable of VCTs to complement existing investments and take advantage of their circumstances can be very beneficial. That said, as an adviser it is important to fully understand the nature of investments you are recommending as in reality the risks differ wildly from VCT to VCT. They are not simply "high risk", as regulatory bodies like to suggest. 

I am intrigued to see how the VCT market develops over the next few years with pension contributions effectively capped for high earners. My concern is that a lot of people will be directed into this space as an alternative to a pension  – simply due to the tax relief – and this has the potential to not end well. We will see.

Tuesday

I continue to look at options for bond proxies within both the fund and investment trust universe to use as part of our client offering, possibly as part of some of our model portfolios. Even for those higher up the risk scale, genuine asset class diversification has significant benefits. Lots claim to deliver this, but few do. 

While I strongly disagree with trying to time the market, I have no problem in dialling down the inherent risk within the portfolio to a degree, where this has followed a sensible discussion with the client. 

Topically, as I’m doing my research, someone sitting nearby starts talking about Bitcoin and the various other crypto currencies and how you just need to "buy the dips". Good luck to him. While I struggle to fully comprehend this new alternative to state currencies, it certainly makes for interesting following.

Wednesday

A home visit to a potential client today. This is just an information gathering session and to introduce myself at this stage. I find it a delicate balance, one I am still constantly refining between conveying to clients what we can do for them and simply explaining the advice process. Often during the fact-find other things come to light, which while important to look closely at, are not the reason the prospect called you there in the first place.

I find this goes one of two ways – either they suddenly understand the holistic nature of the service we provide and really commit to it, or it becomes a bit overwhelming, causing them to back off. The middle ground of ensuring you know all the facts, but then doing things in small, manageable stages, seems a sensible approach. However, no two people are the same, despite everyone trying to commoditise everything these days.

Thursday

This October I am taking the AF1 exam so I fit three hours of study for this into the morning. There are a few reasons behind taking the exam. From a commercial point of view being chartered cannot hurt, but more importantly I intend to become highly competent in the trust and estate planning arena. I see it as a huge potential growth area mainly due to demographics and accumulated wealth.

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