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Introduction Contents

www.successionadvisoryservices.com 03

From Group Ceo Simon Chamberlain

SuCCeSSFul inveStment iS CritiCal to Future FinanCial wellbeinG and SuCCeSSion provideS innovative and eFFeCtive inveStment expertiSe to meet ClientS’ inveStment GoalS. Succession provides investment solutions from global fund managers and investment houses, as well as specialist niche investment managers, delivered through our investment matrix to match the volatility and return targets agreed with your client as part of a financial plan.

assessing the quality of investment performance and fund manager capability can be challenging and subjective. that is why we created a four-tier solution, co-ordinated by the Succession investment Committee.

• Succession works with investment experts to deliver our investment strategy. The strategy is founded on significant academic research, which emphasises the importance of strategic asset allocation and diversification. Our aim is to deliver investment returns that match your clients’ long term goals and aspirations, within an agreed risk profile that suits their attitude to risk and loss.

• we use the research and expertise of rayner Spencer mills, a dedicated resource, to monitor the performance of individual funds, as well as the performance of fund managers and the investment houses, analysing performance against agreed targets for return and volatility.

• the Succession investment Committee reviews funds on a monthly basis and committee members possess both the expertise and knowledge to challenge events and activity.

• And finally, there’s you. The planners and advisers who best understand and appreciate what clients are seeking to achieve and to give them the peace of mind that their financial plan is on target.

while past performance can provide no guarantee of future returns, our rigorous approach to investment means clients can be certain their investments are subject to continuous sophisticated analysis and scrutiny from an experienced team of experts.

Simon CHamberlain

04 SucceSSion Matrix A look back at five years of the Succession investment matrix.

06 General econoMic overview Fourth Quarter review 2014.

08 StrateGic verSuS tactical inveStMent From Charles Stanley pan asset.

09 Mind the Gap From F&C.

10 inveStinG like harvard and Yale From Frontier Gottex.

11 intelliGent incoMe for retireMent From Henderson Global investors.

13 underStandinG Your inveStMent portfolio From Quilter Cheviot.

14 reSiStinG the eMotional Spin cYcle: less about the market, more about the client, from Sei.

15 riSk vs uncertaintY From Seven im.

16 MakinG the MoSt of Multi-aSSet From vanguard asset management.

17 activelY SeekinG returnS From vestra wealth llp.

18 SucceSSion inveStMent coMMittee MeMberS

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04 www.successionadvisoryservices.com

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Global best practice has consistently identified objective financial planning as key to providing client value, not market timing or stock selection. Armed with this powerful insight, Succession developed a sophisticated Investment Matrix that provides a robust, risk-controlled investment framework to help clients realise their financial goals.

The Succession Investment Matrix calls on the expertise of global fund management houses, as well as specialist niche investment managers, to provide investment solutions that meet the individual needs of clients. We source investment expertise from around the world to create a range of best-of-breed, yet risk-controlled, fund choices for our clients which includes traditional active and passive funds, multi asset solutions, and managed models to focus on

growth or income. The Matrix is based on years of academic research, and emphasises diversification, strategic asset allocation and automatic rebalancing.

Each client’s individual financial plan and a complete understanding of their attitude to risk is key to using the Matrix effectively. The financial plan gives a clear indication of the level of growth or income required to meet their financial goals and the attitude to risk report illustrates the degree of loss they are prepared to accept.

DUE DILIGENCE

Thorough due diligence is completed on each fund manager to ensure their investment solutions are acceptable for inclusion on the Matrix. Individual

Succession Investment MatrixOUR OWN EARLY ANALYSIS CONFIRMED THAT CLIENTS WANTED THEIR INVESTMENTS TO GROW STEADILY, WITHIN AN AGREED VOLATILITY RANGE, WHICH MIGHT CHANGE DEPENDING ON HIGHLIGHTS OF THE FINANCIAL JOURNEY

SEVENInvestment Management





1

FUND OF FUNDS ASSET CLASS STRATEGIES

MULTI ASSET PASSIVE

MANAGER OF MANAGERS

2

3

4

5

MANAGED PORTFOLIOS






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funds are then assessed for risk positioning, by comparing the fund’s performance and risk data with that of the investment parameter matrix, and then allocating each fund to the fund solution matrix.

we review the longest set of data available and will review back-tested data if the fund has only a short track record.

Finally, we overlay the qualitative information we have gained from the due diligence process to ensure we have taken into account the fund’s process and objective. in most cases, additions to the investment matrix involve a fund range rather than a single fund, and although the process looks at each fund individually it also takes account of how the range is expected to work together.

MonitorinG riSk

Succession works with a 1-5 risk profile range as we believe this provides a wide enough selection to deliver a robust set of solutions for most client circumstances.

Succession is also keen that clients understand the potential downside of investing in a particular set of assets and so a risk measure termed ‘maximum loss’ is also included in our reviews to illustrate this. it estimates the potential maximum loss to a client in a given period of time, based on historic data, and helps to put each risk profile into context.

the mapping of funds onto the Succession investment matrix is based on a range of data, with the emphasis on the final parameters being on the longer term, allowing fund solutions to revert to their mean levels of risk and return – a point emphasised by all of the risk profiling tools. The term we took to best reflect this was three to five years as this gave most solutions the time to demonstrate a normalised risk/return profile.

the matrix was built by taking asset allocation data from a number of sources – various risk profiling tools; peer group or investment association sector data; and also data surveys such as the barclays equity and Gilt Study – which was then used to construct sample portfolios. these portfolios were then back-tested over ten years to provide information on the historic pattern of returns and risk for those asset allocations. this data was then combined with sector (peer group) data and the information from surveys to build a set of parameters that reflected

the likely range of returns for a 1-5 risk range. the final parameters are then cross checked on an annual basis to ensure they remain acceptable in the current economic environment and in relation to relevant market trends.

we were conscious that these parameters were developed from historic data sources but that investor’s expectations are looking to the future. we should therefore emphasise that these parameters are focused on the longer term where data sets tend to revert to their mean. there

are no really robust methods for predicting future risk and returns but there is near certainty that there will be volatility along the way and that potentially, at any single point in time, the parameters will be exceeded by some of the solutions, such as in the financial crisis of 2008. there is an element of forward looking research in the process and it is in the selection of the fund solutions to fit the matrix based on the key principles and the qualitative information coming from the due diligence process.

in the short term the guidelines may be exceeded such as in times of extreme economic or geo-political stress and it is the role of the Succession investment Committee to ensure the fund solutions are managed to the parameters set by the matrix. ■

the Succession investment Matrix:

• Is a transparent and completely audited investment process.

• Comprehensively categorises clients’ attitudes to risk and tolerance to loss, on a scale of 1-5 • It caters for an exhaustive range of investment styles and disciplines. Noonesizefitsall.

• Is independently reviewed on a monthly basis, by Succession’s Investment Committee with independent oversight from Rayner Spencer Mills Reseach.

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The final quarter of 2014 was a more volatile period for both equity and bond markets across the world. October saw a brief dip in markets as a combination of geo-political concerns and weaker economic data led to a fall in equity markets and a fall in bond yields as investors chased safe haven assets. This fall had been predicted by a number of market observers based on the high level of valuations in western markets - it was however temporary as markets recovered for the remainder of the quarter particularly in the US.

Perhaps the biggest surprise of 2014 has been the strength in core Government bond markets, together with the returns from investment grade credit. 2014 was expected to be a year of economic recovery and the prospect or implementation of rising interest rates but expectations for rate rises have been pushed back, with the result that core Government bonds have delivered much stronger returns than expected. Many fixed interest investors were caught out by this in 2014, holding short duration strategies.

Country-wise, Japan has responded to a slowdown which saw a return to recession in the first half of the current fiscal year with even more QE. In Europe, economic weakness has resulted in rate cuts, despite the strength of recovery in some peripheral countries such as Ireland and Spain. The core economies, such as Germany, have suffered a slowdown under the influence of slower growth in Russia and the emerging world, together with France and Italy, due to a lack of reform.

In other assets, commodity weakness may have been expected, but the size of declines in certain areas, such as iron ore and oil, will have surprised many. A further surprise in 2014 has been the strength of the Indian and Indonesian stock markets as both were supposedly part of the so-called ‘fragile five’. Both these countries have been rewarded by markets for embarking on the first stages of a much necessary reform process. The US $ will end the year as the world’s best performing major currency – perhaps the surprise here is that investors had to wait so long for dollar strength which had been expected to kick in from the beginning of 2014, rather than mid-year.

Whilst 2014 saw a continuation of the universal adoption of unconventional monetary policy, this is likely to come to an end for the US and the UK in the next year. In contrast both Japan and Europe are likely to persist with ultra-easy monetary policies. What this divergence in policy means for markets is unclear and forecasting economies and stock markets is always hazardous - one of the mantras of the investment world is never combine a forecast market level with a time. These days, forecasting has an added complication in that the investment environment is one that investors have not experienced before. This economic cycle is different because the recession that preceded it was caused by a financial crisis, rather than a standard business cycle downturn - a balance sheet recession that required extraordinary monetary measures to combat it and turn markets and economies around. In fact, Central Bank policies have targeted higher asset prices as a means of stimulating economic activity although there continues to be huge debate about the success of this policy.

Markets have been relatively buoyant in 2014 but the response from economies has been more sluggish than many would expect. This ties in with the work by Reinhart and Rogoff in their acclaimed book ‘This Time It’s Different’ which explained that markets often recovered

faster than economies after banking crises. The implementation of ZIRP (Zero Interest Rate Policies) and Quantitative Easing (QE) have encouraged the market to front run the economic cycle. Even now whilst the US and the UK are showing convincing signs of economic recovery, Europe and Japan remain very sluggish. In the US especially, the relationship between these cycles is out of sync - not only is the stock market cycle well ahead of the economic cycle, the monetary cycle is behind the economic upturn. At this stage in a normal economic cycle the stock market would not have risen as much and interest rates would not be as low as they are today in an economy where job creation is now buoyant.

Looking at economic fundamentals, 2015 is likely to see significant divergence in monetary policies. This is because of the difference emerging in economic performance, both in terms of growth and inflation, between the US and the UK on the one hand, and Europe and Japan on the other. This policy divergence is a complex issue for equities because markets have risen strongly on the back of expansionary monetary policies that will no longer be adopted universally. In the US, the stock market will have to survive both the withdrawal of QE and at some stage, a rise in US rates. In contrast Europe and Japan look set to provide further monetary stimulus through increased levels of QE in 2015. Investors will look for concrete


General Economic Overview FOURTH QUARTER REVIEW 2014

EQUITY MARKETS OVERVIEWChart showing 2014 returns for major market indices:

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General Economic Overview FourtH Quarter review 2014

RSMR Rayner Spencer Mills Research

signs of an improvement in economic growth and a pick-up in inflation in these regions. It is also possible that monetary divergence itself could be the source of trouble. this would be especially true if the uS tighten rates aggressively in contrast with the actions of the european Central bank (eCb), which could be akin to driving a car with one foot on the break, and another on the accelerator at the same time.

uk

The final quarter has proven to be weaker for the uK market but stable from an economic growth perspective. in global terms the economy is one of the strongest in western markets, falling short of the uS market but ahead of most european economies. october was a weaker month for equities but the uK equity market produced a strong positive return in november still underperforming the main global equity index. large cap stocks continued their recent outperformance of medium-sized and smaller companies and ‘growth’ stocks generally outperformed ‘value’. the second estimate of third quarter Gross domestic product (Gdp) came in at the same as the initial estimate of 0.7% (3% annualised), which maintained the recent trend of reasonably strong growth. Gdp forecasts for 2015 are for the uK to be amongst the fastest growing of the G7 economies. this continues to raise questions as to when interest rates may begin to rise but the bank of england has stated its concerns about the global economy, which may delay this decision until after the election in 2015. the unemployment rate remained at 6% and wage inflation was above inflation for the first time since 2009, although this is partly a function of low inflation.

market valuations remain not overly stretched but not cheap either. Companies in the FtSe 100 index look reasonably attractive at current valuation levels versus history and versus both mid and smaller caps given the strong returns from the latter categories over the last couple of years. there are headwinds for the uK as Government borrowing remains higher than anticipated with more austerity policies required to balance the books. the uK also needs to see stronger numbers from its main trading partner, europe, before sustained growth can be realised.

SuMMarY

the returns from equity markets over 2014 have been less momentum-led than in 2013 and have shown the need for companies to deliver profits to reflect their market valuations. the continued surprise has been the resilience of bond markets and the fall in yields much against investment consensus for 2014. western developed markets have seen strengthening economic growth, particularly in the uS and the uK, whilst europe has continued to falter but on a very country specific basis.

in a normal economic cycle, investors could expect better returns from equities going forward as markets would not have run so far, or re-rated so significantly from their 2009 lows. One of the consequences of unconventional monetary policies has been that markets have front run the improvement in the global economy. at best, outside of the uS, markets are fair value.

the more recent economic growth patterns have seen divergent economic recoveries and divergent expectations on monetary policy and so volatility has increased. investors should not expect a change to these more recent patterns in 2015. in the uS, although the labour market is buoyant, wage growth has remained muted, although starting to pick up in recent months. overall the economic recovery looks set to continue which should allow the market to navigate its way through a path of moderately higher interest rates. monetary tightening is likely to lead to some form of uS market de-rating so progress is likely to lag the increase in company profitability.

any sign of a sustainable pick up in europe and japan could see a positive response from their stock markets. in these economies monetary conditions, a weaker currency and lower oil prices all give the possibility of a positive surprise next year. the Chinese economy, although slowing, has seen the authorities move to deal with problems in both property and shadow banking. Confidence that a hard landing in China will be avoided would be a positive for all asian markets next year.

Fixed interest markets have been one of the positive surprises for investors in 2014. interest rate rises in both the uS and the uK have been put off, whilst markets have now factored in lower rates in both europe and japan. 2015 could be more challenging for government bond markets, although the fragility of the recovery and aftermath of the global financial crisis, means rates will stay much lower than peaks of previous cycles.

Globally, there is still too much debt, especially in the West, and deficient demand. investors continue to place considerable faith in the ability of Central banks to manage the global economy out of this situation and put the world onto a footing for sustainable growth.

investors need to be aware of potential risks, as well as potential returns, when positioning portfolios and so portfolio diversification with some hedges against adverse outcomes is advisable. investors should not be concerned that these hedges do not all work at the same time, the point is that they protect the portfolio against different outcomes – without them the portfolio would only do well if the central outcome came to fruition. whilst this remains the base case, it is not an absolutely certain one. to hedge against adverse outcomes investors should consider:

• Holding some cash for short term opportunities (optionality).• Retain exposure to selected fixed interest markets.• look to include some absolute return funds that have delivered positive returns in years when markets have delivered a negative outcome.• what they care most about, losing money or missing out on an opportunity. ■

ken raynerInvestment Director

rayner Spencer mills research ltdjanuary 2015


plenty of ink has been spent arguing over the merits of long term investment compared to making switches on a tactical basis. there are some advisers who tell their clients to buy and hold good quality shares for the long term, ignoring the ups and downs of markets and the fashions and fears of investors. after all, they argue, the purpose of share investment is to participate in the growth of assets and dividends generated by good companies. over a long period the results can be very rewarding. if you had bought microsoft in its early days you would now be much richer. patience can bring dividends. there are others who disagree. For every microsoft success there are many failures. if you had bought and held yesterday’s technology and the day before’s successes, you might now have some share certificates that are worthless following bankruptcy, or be holding companies that have not kept pace with the index. the companies in the FtSe 100 large business index today are a very different list from that of thirty five years ago, before mobile phones, before handheld computers, before social media. The list of 1980 was also very different from the list of 1945, as a war torn uK struggled to recover in an economy dominated by steel, coal and railways, which were promptly nationalised. there is a compromise answer to the dilemma about sticking with good companies, but accepting the pace of change makes choosing them very difficult. You can buy an index tracker fund which will give you long term exposure to uK or uS or other share markets. the index is itself a kind of investment manager, regularly evicting the companies that are in trouble or struggling to grow, and welcoming in the new and up-and-coming success stories as they reach the right size. this darwinian process means you can simply hold for the long term one or more reputable Stock market index, which will take care of changing fashions and the rises and falls in sectors and companies. you do not capture the very small companies that are going to succeed in their early days, but you have a stake in them once they are succeeding. you usually avoid going down with the bankruptcy of a former large company.

there is still, however, a question mark over whether it is right to buy and hold the index come what may. it is true that over most longer time periods just buying and holding an index of shares on a major stock market does deliver dividend growth and capital appreciation. the long term trend is up, as economies get richer. Profits grow, assets become more valuable, property values rise, and shareholders often participate in this success. Such a view can work, but it can also lead to substantial disappointment. Stock markets do fluctuate widely. In my investment lifetime so far I have seen the oil crisis of 1974, the bursting of the technology bubble in 2000 and the great recession of 2008 do great damage to uK and uS stock market values. i have also witnessed the even bigger share crash in Japan at the end of the 1980s. The Japanese share index is still well below its levels of 35 years ago. this is a salutary reminder to those who say buy and hold is always a good idea. it has not worked for a long period in japan if you managed to buy at the old peak. it means you do need to think tactically, to think for the shorter term, as well as strategically. you may well be right in thinking that holding an index or portfolio of good uS or uK shares is the way to generate returns, but starting your portfolio at or near a market peak is going to make that very difficult. That is why many investment managers are driven to try to sell some shares or markets when they have done well, and to seek better value in shares and markets that have been through a rough patch but now have better prospects. it is why we try to cut risk and hold more cash or bonds if it looks as if stock markets are going to have one of their severe corrections. it is also why you will be advised to have a diversified portfolio. No-one can always call markets correctly. it is all a balance of probabilities, judgements based on a mixture of understanding and experience with no guaranteed way of being right. Holding different types of asset and shares in different markets can protect your wealth from the most violent swings that can occur to individual companies, and even to individual markets and countries. ■

Strategic versus tactical investmentby John redwoodChairman of the Charles Stanley Pan Asset Investment CommitteeCharles Stanley pan asset

the information and opinions expressed herein are the views of the author.

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Mind the gap

the potential impact of the announced changes on the advisory industry shouldn’t be underestimated. the value of advisable assets (money that would have previously been annuitised) is likely to run into the billions and with life expectancy continuing to increase, the opportunity is significant both in terms of scale and duration.

tailored outcoMeSof course no two clients will have the same set of circumstances. there will be significant divergence in terms of pension pot sizes for example. and retirement ages will also vary. Some individuals will be in a position to retire early whilst others need to work longer. it’s also likely that the number of people in ‘partial-retirement’ will also increase. as in the pre-retirement phase the emphasis will be on the provision of tailored advice with recommendations needing to be suitable for individuals with specific characteristics and seeking defined outcomes.

retireMent SeGMentation – range of individual characteristics and target outcomes

Multi-aSSet incoMeof course there’s likely to be a clear emphasis on income provision and one theme that is emerging loud and clear is the potential role of multi-asset income. with the right structure, approach and expertise in place we believe that multi-asset income has the potential to deal with a range of ‘outcomes’ that will commonly come to the fore as advisers work to deal with client specific needs.

• longevity – increasing life expectancy hopefully means your clients will enjoy a long and healthy retirement. The flip side is that long-term sustainability needs to be carefully considered. if drawing down on a pension pot for income, capital erosion can pose a real threat, especially if market falls impact on a portfolio early in its life. is it realistic to believe it will ever fully recover? of course market risk poses a threat to any portfolio, but by spreading risk across a range of asset types and by placing a clear emphasis on assets capable of generating a ‘natural’ yield, longevity risk can be more effectively countered.

• Inflation – any income solution needs to keep step with inflation and with the right approach multi-asset income has the potential to do so. assets – like equities – have the potential to generate returns in excess of inflation which can help a portfolio retain its capital value in real terms. there’s also scope for yield to keep pace (or even outstrip) rising prices through dividend growth on equities, rental growth on commercial property assets or the inclusion of asset types that currently offer a yield in excess of the rate of inflation.

• income risk – the importance of reliability of income shouldn’t be underestimated. whether it’s derived from cash, property, equities, fixed income or other asset classes, yields can fluctuate – and sometimes markedly so. multi-asset income aims to counter this by investing across a diverse range of asset types. the impact of a fall in yields in one area will likely be less apparent in a well-diversified portfolio than in a more narrowly focused offering.

• Capital erosion – when income is being derived from a pot of capital it’s important to preserve that capital as much as possible. Again diversification can help here. As well as diversifying from a strategic perspective it makes sense to consider more tactical perspectives too. by adjusting relative exposures to underlying asset types it’s possible to both better protect capital and position it for growth given current or expected economic conditions.

JudGeMent callit is highly unlikely that you’ll be able to implement a one-size-fits-all approach. In some cases annuities will still have a role to play. in other circumstances strategies like drawdown will be viable options. Given the type of outcomes (longevity, inflation, income risk, capital erosion) associated with income generation, however, we believe that multi-asset income funds like our own F&C mm navigator distribution Fund offer a practicable and robust potential solution. F&C mm navigator distribution Fund is managed by a team of eight led by rob burdett and Gary potter.

f&c MM navigator distribution fund – the income solution• Diversified multi-asset portfolio• Award winning investment team• Convenient quarterly income payments• Current yield 4.9%*• Top quartile for total return over 2, 3, 4, 5 and 6 years. 2nd quartile over 1 and 7 years.** ■

* Historic net yield based on share price at 28.11.14 and distributions paid over the previous 12 months source: F&C, ** Lipper IM 30 November 2014, net of fees in sterling.


past performance is not a guide to future performance. Stock market and currency movements mean the value of shares and the income from them can fall as well as rise and you may not get back the amount originally invested. prospective investors should consult the Key investor information document for the relevant share class before investing, which is available from your financial adviser or F&C Fund Management Limited.

by rob thorpeHead of Uk Sales (Retail and Wholesale)F&C

PensionPot Size

Age 45 55 65 75 85+

Pre-Retirement

Partial/earlyRetirement

Retirement Later LifeHigher Higher

Higher

Lower Lower

LowerRisk Appetite

Financial Engagement

/Sophistication

£250k+

£150-£250k

£50-£150k

<£50k

Grow

th

Grow

th & incom

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income &

capital

preservation or Grow

th

income &

divestment


The US University Endowment Funds such as Harvard and Yale (the “Super Endowment Funds”), have been leaders in diversified multi-asset class investing for over two decades. Through this approach to investing and with a large exposure to alternative asset classes, they have achieved attractive returns with moderate risk.

The Super Endowment Funds are exceptionally well resourced and have access to the best fund managers and private equity schemes, which contributes significantly to their investment success. However, research by Frontier Gottex demonstrates that by adopting similar asset allocation principles, it is possible for smaller investors to obtain high risk-adjusted returns for their own portfolios, superior to that of traditional equity/bond portfolios and to most balanced investment funds.

Each year we produce a research paper outlining our methodology and the results of replicating the asset allocation of the large US University Endowments Funds. This article is a summary of our results.

ENDOWMENT ASSET ALLOCATIONThe objective of our research is to determine whether a portfolio that applies an Endowment asset allocation to a set of asset class indices is able to deliver superior risk-adjusted returns relative to a traditional portfolio. Therefore, each year we take the average asset allocation of Harvard and Yale and select a representative index for each asset class to create a hypothetical portfolio. The hypothetical portfolio returns are calculated by multiplying asset class weights by index returns and rebalanced annually every 30th June (when asset allocation figures are updated). We have now managed to collate data from July 1998 to June 2013 (15 years) allowing us to show how an Endowment Index Portfolio would have performed over this time horizon.

The asset allocation of our hypothetical Endowment Index Portfolio is based on Harvard and Yale’s average asset allocation in 2013 and presented in the chart below. This portfolio allocates 44% to alternative asset classes.

Endowment Index Portfolio Asset Allocation 2013

Source: Frontier Gottex

ENDOWMENT INDEX PORTFOLIO RESULTSThe resulting performance of the Endowment Index Portfolio is shown in the table below. All returns are shown gross of management fees and access costs.

Relative Performance of Endowment Index Portfolio (July 1998 to June 2013)

Source: Bloomberg, US University Endowment Annual Reports 2013, Calculations by Frontier Gottex.

The hypothetical Endowment Index Portfolio captures on average 89% of Harvard and Yale returns thereby confirming that asset allocation is the main driver of return and risk in multi asset portfolios. The portfolio generated a 15 year annualised return of 9.8% when hedged into GBP relative to just 5.2% for a UK Equity/Bond portfolio and 3.9% for the UK Equity market. The Endowment Index Portfolio also out-performed many UK actively managed funds including the IMA Balanced and IMA Growth fund groups by a wide margin.

This outperformance over long periods of time highlights the benefits of a globally diversified asset allocation with significant allocations to alternative asset classes. Relative to an Equity/Bond portfolio, the inclusion of additional asset classes in the Endowment Index Portfolio increased the 15 year annualised return. In addition, a traditional Equity/Bond portfolio has experienced a fifteen year period of declining interest rates that have been a key driver of bond returns. Going forward, we believe that bonds have a low probability of generating these high historical returns.

SUMMARYWhile the performance of the Endowment Index Portfolio is not as strong as the Super Endowment Funds, it still manages to capture 89% of the Super Endowment’s return before fees. Harvard and Yale have consistently achieved attractive investment returns with moderate volatility due to their multi-asset approach to investing, their strategic approach to asset allocation, and their significant exposure to alternative asset classes. Whilst most investors do not have access to the superior resources of the Super Endowment funds, our research demonstrates that by applying their multi-asset principles to an investable index based portfolio, there is scope for achieving risk-adjusted returns that have historically been superior to those of more traditional portfolios.

At Frontier Gottex one significant input in to the asset allocation of our multi-asset funds and model portfolios is the investment strategy and asset allocations of the large US University Endowment Funds and we base our strategic asset allocation on this research. ■

Investing like Harvard and Yale

The information and opinions expressed herein are the views of the author.

1 US University Endowment Annual Reports 20132 For comparison purposes, the returns of the Endowment Index Portfolio has been hedged into GBP

The contents of this document are based upon sources of information believed to be reliable. Frontier Gottex has taken reasonable care to ensure the information stated is factually true. However, Frontier Gottex make no representation, guarantee or warranty that it is wholly accurate and complete. This document does not constitute an offer by Frontier Gottex to enter in any contractual/agreement nor is it a solicitation to buy or sell any investment. The returns of the hypothetical Endowment Index Portfolio are based upon representative indices for each of the underlying asset classes and further information is available on request. Past performance is not necessarily a guide to future performance. Gottex Asset Management (UK) Limited is authorised and regulated by the Financial Conduct Authority (“FCA”).

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Intelligent Income

please read all scheme documents before investing. before entering into an investment agreement in respect of an investment referred to in this document, you should consult your own professional and/or investment adviser.past performance is not a guide to future performance. the value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested. tax assumptions and reliefs depend upon an investor’s particular circumstances and may change if those circumstances or the law change. if you invest through a third party provider you are advised to consult them directly as charges, performance and terms and conditions may differ materially.nothing in this document is intended to or should be construed as advice. this document is not a recommendation to sell or purchase any investment. it does not form part of any contract for the sale or purchase of any investment.any investment application will be made solely on the basis of the information contained in the prospectus (including all relevant covering documents), which will contain investment restrictions. this document is intended as a summary only and potential investors must read the prospectus, and where relevant, the key investor information document before investing. Issued in the UK by Henderson Global Investors. Henderson Global Investors is the name under which Henderson Global Investors Limited (reg. no. 906355), Henderson Fund management limited (reg. no. 2607112), Henderson investment Funds limited (reg. no. 2678531), Henderson investment management limited (reg. no. 1795354), Henderson Alternative Investment Advisor Limited (reg. no. 962757), Henderson Equity Partners Limited (reg. no.2606646), Gartmore Investment Limited (reg. no. 1508030), (each incorporated and registered in England and Wales with registered office at 201 Bishopsgate, London EC2M 3AE) are authorised and regulated by the Financial Conduct authority to provide investment products and services. telephone calls may be recorded and monitored. ref: 34u


by Simon hillenbrandHead of UK RetailHenderson Global investors

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10

German10-year

bund

Cash 10-year gilt US equities Long-datedgilts (>15

years)

Europeanequities

Inv. gradecorp. bonds

UK equities UKcommercial

property

High yieldbonds

%

Income yields as at 31 July 2007 and 28 February 2015

31 Jul 2007 28 Feb 2015

in a world of low interest rates and suppressed yields, obtaining an attractive income can be a challenge. Annuity markets reflect this eloquently. twenty years ago a pension pot of £100,000 would have bought an income for life for the average 65 year old of around £10,000. today a retiree could expect half that amount.

Central banks’ policies to deal with the financial crisis – interest rate cuts to record lows and quantitative easing (asset purchases) – have contributed to these low yields.

So does this mean that investors should try and compensate for the low yields on cash and government bonds by considering higher yielding asset classes? the chart below shows the yields on different asset classes just before the financial crisis and at the end of February this year.

Source: Henderson Global Investors, Datastream, income yields (not adjusted for inflation) as at 28 February 2015. IPD, UK commercial property initial yield, source IPD. Yields may vary and are not guaranteed.

the low interest rate environment has affected bonds the most. in fact, a German government bond barely offers any income. this seems ludicrous until it is put into the context of the european Central bank’s introduction of negative deposit interest rates (ie, charging banks to deposit money with the central bank) and also fears about a potential break-up of the euro. in effect, the German government is charging investors a high price (through a low yield) for the relative capital safety of its bonds. Since the income from any asset class is payment to an investor for supplying capital, it is worth understanding the risks attached to different asset classes.

accountinG for inflationCash and government bonds such as treasuries, gilts, and bunds offer some element of safety for investor capital, but they are not without risk. Inflation is the primary risk – the danger that investors are trapped in a low yielding asset with inflation eroding the income and capital’s purchasing power. Inflation is currently subdued, but this is partly a result of the collapse in the oil price, which will eventually drop out of year-on-year comparison measures. there is

also growing debate about whether the uS and the uK will raise interest rates this year, which would weaken the competitiveness of the yield on existing fixed income securities. Remember: when bond yields rise, the price falls, and vice versa.

There are means of mitigating the impact of higher inflation/interest rates. index-linked bonds, which link the coupon on a bond and the final capital paid at maturity to the rate of inflation, are one. Another is to own debt with a floating rate such as secured loans where the income paid rises when interest rates rise. Corporate bonds offer higher yields to compensate for the higher risk of default (a company’s inability to make the required payments) and this higher yield can offer some cushion against interest rate rises. Currently defaults are very low, but there has been a recent tendency for bond issuers to become more aggressive, reducing the covenants (protection terms) on bonds and to engage in borrowing more to pay dividends. in the longer term this could store up trouble, so investors need to pay careful attention to the corporate ‘health’ of each individual borrower.

incoMe Growtha growing economy should allow company earnings to rise, which ought to lead to higher dividends from equities. the table below, taken from the Henderson Global dividend index, shows that in each of the last five years dividends have risen as the global economy has recovered.

Global dividends 2010 2011 2012 2013 2014 total uS$ billion 778.0 946.4 1024.8 1056.2 1167.0 year-on-year % change 6.6 21.6 8.3 3.1 10.5

Source: Henderson Global Dividend Index, February 2015

dividends are discretionary, however, and more vulnerable to the volatility of earnings than bonds, which partly explains the fluctuations in the pace of dividend growth. For example, Tesco, which has been pressured by discount supermarkets, recently scrapped its final dividend to preserve cash in the business. Similarly, the general election poses risks for some of the utilities in that politicians may seek to impose price controls and limit pay-outs to shareholders. determining whether dividends can be sustained, let alone grow, therefore requires analysis of a company’s cash flows and operating environment.

it is clear from this brief look at income asset classes that each of them exhibits different behaviours. Diversification is the mantra of intelligent investing and at a time when the economic outlook remains uncertain it would appear to offer a useful template for income investors.

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2014 Q4


As life evolves, so do your goals for tomorrow and your

financial requirements to meet them. With constantly

changing markets and so many investments to choose

from, it’s important to plan how you’re getting there.

At Jupiter, we are committed to active management,

seeking to deliver market-beating returns over the long

term. We give our fund managers the freedom to find

opportunities that they believe could offer superior

returns, and encourage them to invest with conviction.

We emphasise accountability and give them the

responsibility to deliver. To see how Jupiter’s active

investments could make your money work harder

for tomorrow’s goals, visit jupiteram.com, contact

your financial adviser or search: JUPITER ASSET

MANAGEMENT.

Past performance is no guide to the future. The value

of investments can fall as well as rise and you may

get back less than originally invested.

ACTIVELY INVESTING FOR YOUR FUTURE

TOMORROWDo you know how you’re getting there?

Jupiter Asset Management Limited, registered address: 1 Grosvenor Place, London SW1X 7JJ is authorised and regulated by the Financial Conduct Authority. If you are unsure of the suitability of an investment please contact your fi nancial adviser.

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Understanding your investment portfoliothe optimal investment portfolio needs to carefully balance a client’s risk and reward profile. While some people may initially not like the idea of taking risks, they may find they regret a safe approach if they do not get back the investment returns they had hoped for. it is therefore essential to establish a client’s risk profile from the beginning and think carefully about this balance before investing.

at Quilter Cheviot investment management, the first step for our investment managers in achieving this is to seek a clear understanding of your client’s financial circumstances, their investment objectives and expectations and, most importantly, the level of risk they are prepared to take.

Start by defining their main investment objectives. are they looking to grow the capital value of the portfolio? to grow the capital value and generate some degree of income from the portfolio? or are they aiming to primarily generate income from the portfolio?

if a client’s greatest requirement is for capital growth they should look at investments with the potential to increase in value over time, such as company shares.

alternatively, if the main objective is to generate immediate – and perhaps stable – income they should adopt a strategy that includes more fixed interest securities, such as government bonds or corporate bonds.

in order to achieve the maximum capital growth from an investment one needs to be prepared to take some risk. in general, the higher the investment returns one seeks, the more risk one needs to take.

the recommended level of investment risk can be outlined by the client’s risk profile. To establish a risk profile consider two aspects; the client’s willingness to accept risk, often referred to as risk tolerance, and the client’s financial ability to withstand losing some or all of their investment portfolio, referred to as risk capacity.

once we know what level of risk to take, there are various ways to manage investment risk within a portfolio. Most specifically, investing over the long term and diversification both help to spread risk. this can be achieved in a number of ways, for example by investing in a range of different asset classes, or investing in different geographical regions and industries.

devising a carefully tailored portfolio will allow you to feel confident that your client’s investment will deliver the best possible returns. we recommend regularly monitoring and reviewing any portfolio to ensure it remains in line with expectations.

we have recently completed a review of our investment process and designed a new brochure, understanding your investment portfolio, outlining the key factors that we consider when managing an investment portfolio. the brochure is available on our website or for more information on how Quilter Cheviot can guide a client’s investments in our discretionary portfolio Service, contact us on 020 7150 4005. ■

investors should remember that the value of investments and the income from them can go down as well as up.


Quilter Cheviot Limited is registered in England with number 01923571. Quilter Cheviot Limited has established a branch in Dublin, Ireland with number 904906, is a member of the London Stock Exchange, is authorised and regulated by the uK Financial Conduct authority, is regulated by the Central bank of ireland for conduct of business rules, under the Financial Services (Jersey) Law 1998 by the Jersey Financial Services Commission for the conduct of investment business in jersey and by the Guernsey Financial Services Commission under the protection of investors (Bailiwick of Guernsey) Law, 1987 to carry on investment business in the Bailiwick of Guernsey. Accordingly, in some respects the regulatory system that applies will be different from that of the united Kingdom

QUARTERLYBULLETIN

2014 Q4

most investors get caught in the trap of buying high and selling low, out of fear or media hype. Here are a few key ways to avoid getting trapped in emotional decision making and keeping your investments on track.As we look back over the first decade of the 21st century, we can draw one undeniable conclusion – it was a bear of a time for investors. major market declines from 2000 to 2002 and then again in 2008 dragged equity returns well below their long-term averages.but research will show that, as disappointing as the markets have been, the average investor has fared far worse. as defined by a major investment research firm Dalbar, the average investor refers to the universe of all mutual fund investors whose actions and financial results are restated to represent a single investor. this approach allows the entire universe of mutual fund investors to be used as the statistical sample, helping to ensure ultimate reliability.Caught in the emotional cycle of investing, many investors continue to pull in and out of the market, abandoning long-term strategies, and paying the price with suboptimal returns.a study of investment behaviour underscores the point. dalbar, inc., compares the long-term returns (up to 20 years) of equity fund investors against the S&p 500 index, which represents a buy-and-hold strategy. In every year since 1992, the average investor has significantly underperformed the index. and although the gap between the two has narrowed in recent years, the average investor continues to hurt themselves with their investment behaviour.investors need to be told time and again, focus less on market behaviour and more on client behaviour. the research shows market timing doesn’t pay. below are several strategies that have served investors well for generations. Diversification. Pound cost averaging. patient and consistent investing. these things matter. when others in our industry began to question these time-tested practices, Sei added value to the investment industry through the introduction of the Goals based investment Strategy. nothing that has happened throughout this recent market cycle has eroded Sei’s faith in the value of remaining fully invested – in all markets – and focusing steadfastly on long-term goals.ManaGinG behaviourwhen it comes to behaviour, too much knowledge is a good thing. when markets move through their cycles, investors should avoid getting caught in the emotional highs and lows. the best course for most long-term investors is to change their strategy only when their personal circumstances change, not when the market changes.

re-evaluate GoalSStaying focused on goals can serve clients and advisers well in various markets. to ensure a selling strategy is appropriate, now is the time to help clients reevaluate goals and re-assess risk tolerance and time horizon. after two bear markets in 10 years, many investors have decided that they are not as risk adverse as they originally thought. Further, there is evidence to show investors focused on goals – as opposed to returns – are more likely to stick with a strategy.

take advantaGe of pound coSt averaGinGa simple way to systematically ease back into the market is pound cost averaging – a good option to help avoid buying high and selling low. Simply put, it involves contributing the same pound amount to an investment irrespective of price. For example, an investor contributes £500 per month to a mutual fund which is priced at £10 per share. with each contribution, 50 shares are purchased. if the price drops to £9, the contribution will buy 55.5 shares. If it goes to £11, only 45.45 shares can be bought. more shares can be bought when the price drops and fewer when it rises. Hence, over time, consistent contributions – as opposed to stopping and starting – will help lower overall investment costs.

face the factS. look inwardas advisers evaluate situations, its important to keep three things in mind. First, volatility is a fact of life. the majority of successful investors ride out the dips in the road no matter how steep. Second, history has shown that a diversified investment portfolio of fixed income and equity investments can help increase the likelihood of outperforming inflation, an investor’s biggest nemesis.Finally, rather than looking outward – at the market – it is crucial to look inward. what are the clients’ goals, what levels of risk can they really live with during difficult periods and what steps can they take now to ensure they are prepared for whatever the future holds?a conversation about life goals and risk tolerance can help advisers enhance client relationships. the more clients learn about goals based investing, the more they may appreciate its importance to their investment strategy and the value provided by an adviser. ■

This information is intended to be educational and is not intended as investment advice.

Resisting the Emotional Spin Cycle: Less about the market, more about the client.



by tom williamsStrategic Alliances DirectorSei

QUARTERLYBULLETIN

2014 Q4


Risk Vs Uncertainty

all investors consider return. most investors consider risk. only a few consider uncertainty.

those last two statements may seem too many to be synonymous, and in fact for decades have been treated as such by the financial world at large - taking risk and uncertainty to mean basically the same thing. yet there is a difference between the two which, whilst sometimes difficult to articulate, is as essential to investing as the difference between an equity and a bond.

The first academic work published of the distinction between risk and uncertainty was by university of Chicago economist Frank Knight in 1921:

“Uncertainty must be taken in a sense radically distinct from the familiar notion of Risk, from which it has never been properly separated.... The essential fact is that ‘risk’ means in some cases a quantity susceptible of measurement, while at other times it is something distinctly not of this character…”

although this description gets to the heart of the matter, an explanation with examples might help to clear things up.

risk – we don’t know what will happen in the future, but we have a reasonable idea of the possible outcomes. the easy example here is forecasting the outcome of rolling a die.

uncertainty – we don’t know what will happen in the future, and we have no idea even of the number or kind of options available, let alone a concept of what the probabilities might be. as an example here, think about forecasting what colour an unseen die is…

In the first case, you can calculate the probabilities in your head – there are six numbers, each with an equal chance of appearing. In the second case, it is difficult to even think of the main variable, namely how many colours are there in existence?!

the key point is the difference between something being unknown and being unknowable. if we look at one of the most famous children’s stories ever written, we see a less numerical illustration of this difference. in j.r.r tolkein’s The Hobbit, bilbo baggins wins a magic ring off the creature Gollum by winning a riddle contest. However, bilbo’s winning riddle is “what have I got in my pocket?” Most people reading the book feel a bit discomfited at that point – clearly the question is not a riddle in any sense! the distinction is between the unknown - hinted at with clues - and the unknowable – the contents of a pocket could be anything in the world. ultimately, had Gollum been able to clearly articulate the breach of the riddle-game rules through a definition of uncertainty, the whole fate of middle earth could have been different…

the odd thing is that there is acknowledgement of this in children’s stories and simple human psychology, but it seems to be forgotten when applied to financial theory. Asking a financial forecaster “what’s in my pocket?” and then, based on his reply, only buying that item would not be a sensible investment approach. and yet, when the same forecaster gives his prediction on where the FtSe 100 might be in a year, heads are nodded, notes are taken, and positions bought or sold.

it is not that the forecaster will always be wrong – he or she may be excellent at their job. it is the lack of acknowledgment for uncertainty that is misleading, the implication that financial market outcomes are as predictable as rolling a die, and that sufficient computational power can produce reliable probabilities when this is simply not the case.

So what can we do as investment managers to mitigate against uncertainty? The first step is admitting that it exists. the second step is trickier, because once we’ve conceded that volatility and standard deviation are not exhaustive measures, we have to distinguish between times when we should use them and times when we should not. this can be key place for an investment manager to add value, because analysis of non-quantifiable risks is always, by definition, going to be an area for judgement rather than a formula. ■



by ben kumarInvestment Manager Seven im

QUARTERLYBULLETIN

2014 Q4

by neil cowellHead of UK Retail Salesvanguard asset management

multi-asset investment opens out the opportunity to create portfolios that take advantage of the risk/return attributes of differing types of investment. but all options are not equal and more is not always better. as appreciation of the power of multi-asset investment grows, we need to focus on the question: what should a well-constructed portfolio look like?

GoalSthe starting point, in our view, should always be the investor’s goals. it is can be tempting to set goals that try for the greatest return with the least risk in the shortest time, but this is to put the cart in front of the horse. the key is to differentiate between desired and required returns. desired returns are likely to be higher, but an investment strategy based on required returns, that is, on the return needed to meet the investor’s goals, will generally be sounder and have a greater chance of success. a key advantage of a multi-asset approach is the flexibility it allows in matching a portfolio to well-defined investment goals.

balanceHaving set appropriate goals, the next step is to get the mix of assets right. A key issue is diversification. Through an appropriate spread of investments we help to ensure that the portfolio is as closely as possible aligned to meet clients’ goals. there are a number of factors to consider, but it is important not to be over-complicated. For example, a uK company might sell components which go into capital goods designed and assembled in Germany, exported to australia and Canada for use in mines which supply demand in China. in this case, through a single ‘uK equity’, we are gaining exposure to a number of different markets and investment themes. A simpler portfolio is also likely to offer key benefits such as greater transparency, liquidity and risk control. another crucial point is to focus on what matters. experience and research show that around 80% of investment returns come from strategic asset allocation, that is, the long-term mix of assets. in the majority of cases investing around tactical movements is likely to reduce rather than enhance long-term returns. Financial asset prices are notoriously volatile in the short-term. they are affected by a wide variety of very disparate factors – economic data,

commodity prices, politics and so – many of which can’t be forecast with any confidence and which it is difficult to actual investment outcomes. For investors, it usually pays to ignore day-to-day market noise and focus on longer-term characteristics, which are remarkably consistent.

coStSin any investment strategy, costs matter. in a multi-asset portfolio they are likely to matter more as some assets are more expensive to trade than others. the cost of buying or selling a building is significantly greater than the cost of trading an equity. other costs, such as liquidity premiums or remuneration of skilled management, are likely to be higher and to be difficult to assess and to compare. as we know, differences which appear small at the beginning of an investment plan can become significant when compounded over time.

diSciplinethere is little point in having a wonderfully constructed portfolio, intelligently diversified, with an appropriate balance of risk and return and minimal costs – and then not sticking to it. as with many things that seem obvious, this is not as easy as it sounds. Human behaviour is deeply wired to avoid pain and enjoy pleasure. when times are good, we want to take more risk and seek out new rewards. and when times are bad, our instincts tell us to retreat to safety and hoard our goods. these are rational, sensible responses. but they do not apply universally to investment. as different assets outperform and underperform, our portfolio will lose its finely calibrated balance. like other things in our lives, every so often it will need to be pulled back into shape, generally speaking around once a year. this will almost inevitably require us to sell those assets which have been doing well and buy the ones that have been struggling, in other words, to go against the guidance of our strongest intuitions. it may not be easy, but in a well-managed multi-asset portfolio, it is a response that needs to be learnt and adhered to. at vanguard we have a simple maxim: focus on what you can control. in our experience it helps to concentrate our minds on what matters: goals, balance, costs and discipline. ■

Making the most of Multi-Asset



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iMportant noteSthis document is directed at professional investors and should not be distributed to, or relied upon by retail investors.this document is designed for use by, and is directed only at persons resident in the uK.the value of investments, and the income from them, may fall or rise and investors may get back less than they invested.issued by vanguard asset management, limited which is authorised and regulated in the uK by the Financial Conduct authority.© 2015 vanguard asset management, limited. all rights reserved.

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2014 Q4


by david laneBusiness Development Technical Directorvestra wealth llp

at the heart of the Succession advisory proposition is the idea that every client should have their own wealth plan setting out their personal life goals and objectives underpinned by a clearly thought out investment strategy. but how should this look? Should it be “active or passive”? How can the two be blended and what are the advantages and disadvantages of each approach?

active ManaGeMent

active management essentially can operate at two levels, asset allocation and/or stock selection. the main argument in favour of an “active strategy” focuses on the ability of a Fund manager to outperform “the market”. many Fund managers style themselves as “value” investors, contrarian by nature, seeking those stocks or market themes that are currently out of favour, think oil companies or supermarkets but whose share price will recover and outperform the returns from the broader market. market timing is key to the success of this strategy. philosophically the key takeaway is that the market is irrational which creates inefficiencies that the patient manager can readily exploit. A sentiment reflected by Warren Buffett who said “i’d be a bum on the street with a tin cup if markets were always efficient”. Further, so the active argument goes in more difficult market conditions, an active Fund Manager can tilt the fund to a more defensive position to ride out the volatility and limit the downside impact of a poor market on the investor.

paSSive ManaGeMent

detractors of active managers call all of this (or at least some of it) as mostly bunkum, arguing that much of an active manager’s “outperformance” is simply down to luck, for example a fund may have been launched just at the right time, benefitting from a good market but subsequently doing very little to justify the high fees being charged by the Fund manager. they point to the evidence that supports the idea of passive management, where an investor is best served over the long term by tracking as closely as possible the returns

of a market or a benchmark. proponents of passive investing argue its advantages over its active cousin across a number of areas. The first is cost. Are the fees charged by active managers justified when many are closet index-huggers anyway? additionally, academic studies point to the fact that getting market timing correct is extremely hard. researchers writing in the Journal of Investing observed that “our findings are not encouraging for proponents of active management….we find investors are inevitably better off with a simple buy-and-hold equity strategy rather than trying to time the market….”.

the passive “space” has also been busy evolving. one potential problem with a passive market strategy is that although it is the lower cost option, it forces the investor down the path of “momentum investing”. equity markets are weighted by market capitalisation. the bigger a company gets the more you have to own of it. this may not always be the best outcome. Hence the eggheads of the passive world have come up with the idea of “smart beta”. Putting in place filters to finesse the index you are tracking. themes such as low volatility, price to earnings and dividends are proving popular.

of course, it does not have to be an either…. or. as an investor commenting on this debate wrote, “i don’t think it’s a question of active or passive. 20 years of experience has taught me that both can be combined to good effect.” as an investment house, vestra wealth believes that it is by deploying both active and passive strategies in the model portfolios, as well as the bespoke mandates managed on the Succession platform, that we can maximise value for Succession clients, both in terms of price and performance. there will be times when we do not want to buy the market, but we want some exposure, therefore we would prefer to use an active strategy, looking for a stockpicker who can capture outperformance by picking out those themes that we believe will outperform the broader market. on other occasions, we will want to buy into a market and a cheaper passive strategy is exactly the right play. it is the case of putting in place the right solution to produce the right outcome for the client. ■

Actively seeking returns


1 Gwilym, o.,Secton j and thomas S (2008) “very long equity investment strategies”, the journal of investing, 17(2), 15-23. Quoted in jason butler Financial time Guide “wealth management” second edition 2014.


This publication is for information purposes only and has been approved and issued by Succession Advisory Services. Succession Advisory Services is authorised and regulated by the Financial Conduct Authority. It is not intended that this publication be relied upon by retail investors. It does not constitute an offer, a personal solicitation of any offer, or personal recommendation to enter in to any transaction. Whilst all reasonable care has been taken in preparing this document, the information contained herein is deemed to be reliable but all expressions of opinion are subject to change without notice. Tax legislation is based on our understanding of legislation and practice currently in force. Tax information is subject to individual circumstances and subject to change. We cannot be held responsible for the effect of any future legislation change in interpretation or treatment. Some information has been provided by third parties. We are not responsible for any error, omission or inaccuracy in the material. For investment purposes the value of capital invested is not guaranteed and may fluctuate and you should remember that you may get back less than you have paid in dependent on market conditions.

Ian Shipway CFPIan is a Certified Financial Planner. From an investment perspective, his starting point is to determine the return required to meet client objectives, the client’s tolerance to volatility and short term liquidity requirements. Ian is a keen advocate of asset allocation and asset class investing and an enthusiastic and early adopter of wrap platforms.

Investment Committee Members

Ken Rayner BA (hons) ACII, IMCA founding director of Rayner Spencer Mills Research, Ken began his career in the investment industry in 1989, shortly after graduating from Leeds University with a Degree in Economics and Economic History. Ken sits on the Investment Committee of a number of advisory firms to help them deliver their investment strategies.

Simon TaylorChairs the Succession Investment CommitteeSimon is Platform and Investment Director at Succession Advisory Services and has significant experience in both propositional development and distribution. Simon is also a PRINCE 2 practitioner and is IMC qualified.Working within the financial services sector for over 15 years and prior to joining Succession Simon has held key positions at Bluefin focusing on integration and change programmes, St. James’s Place and the retail banking sector. He sits on the TISA Wrap & Platforms Policy Council and the UK Platform Group.

Christian CaptieuxChristian is Succession’s Compliance Director and is also a member of the Succession Board. He brings considerable experience of platforms, discretionary managed portfolios and other elements of the investment matrix.He is a Chartered Financial Planner and a Fellow of the Personal Finance Society.

Christopher MellorChristopher is a Registered Financial Life Planner with over 35 years’ industry experience. He started working with Succession Advisory Services in 2010 and his business was acquired by national wealth management advisory brand Succession Group in 2012. He is one of the company’s senior Financial Planners, and works on behalf of Succession Group’s clients, managing private wealth in excess of £50M. Christopher brings the client’s perspective on investment to the Committee.

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