niche discretionary fund management. niche discretionary fund management 2 why are you here? we want...

N I C H EDiscretionary Fund Management


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Why are you here?

We want to give you a reason to go and talk to your clients

and to be rewarded for doing so.

N I C H EDiscretionary Fund Management3

Background to a need for a DFM

Extremely volatile/unpredictable markets since 2001

Dreadful market conditions in 2008

Stock markets below levels last seen ten years ago

Near collapse of World economic system

Illiquidity, fund closures, gates or suspensions

Clients questioning their investment returns

FSA acting as a people’s champion, rather than a regulator

Retail Distribution Review

Tightening of FSA/Network compliance on investment advice

Networks and IFA’s wishing to de-risk their business

Quantitative easing, new territory for financial advisers

Wealth Managers planning to enter top-end IFA market


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Tend to be long only

Overweight in mainstream investments, even in difficult market conditions

Overly exposed to equities – even a balanced client will hold as much as 80% in UK and International stocks

Guilty of churning holdings to increase dealing charge income

Bias towards in-house funds

They have an adverse affect on the strength of client relationship

They undermine the positioning of the IFA as the financial ‘brain’

They offer little or no access to alternative or esoteric investments

They are not worth the additional cost

They can resemble passive index trackers at times

They have unloaded their own ‘toxic’ holdings onto their clients in the past

The perceived downside of DFM’s


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Why was Niche developed?

Existing IFA clients specifically requested it because they wanted:

• Access to a Discretionary Fund Manager (DFM) – NOT a wealth manager

• The DFM to be responsible for the client risk profile

• The DFM to undertake the necessary due diligence, both now and in the future

• Asset allocation to be actively managed

• The DFM to be responsible for asset allocation and to blend specialist fund managers in their field

• The DFM to be responsible for the rebalancing of the client portfolio in line with, either the original

client risk profile or a subsequent risk mandate

• The client relationship to remain firmly with the IFA


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The solution

• Rigorous research and due diligence of existing and potential funds

• Asset allocation is actively managed

• An extensive investment portfolio is designed using the risk profile mandate completed by each client

• Access to a wide range of global investment opportunities via specialist fund managers, expert in their field

• We monitor the individual underlying fund performance

• The portfolio will be rebalanced.

• The client relationship remains yours


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Behind the scenes - security

Custodian: Close International Custody Services Limited (“Close”) Close provides full custodial services and secure banking securities for all assets within Niche.

Legal Advisors: Carey Olsen

Carey Olsen provide legal advice on the set-up and operation of Niche, in line with the legal requirements of the GFSC.

Fund Administrators: Legis Fund Services Limited (“Legis”) Legis provides full fund administrative services, ensuring compliance with all GFSC regulations and is fully licensed by the GFSC.

Auditors: PKF (Guernsey) Limited (“PKF”)PKF serves as the independent auditor for Niche.

All outsourced professional international companies with strong reputations and integrity.


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The decision makers

Investment Manager: Argyll Investment Services Limited

Licensed and regulated by the Guernsey Financial Services Commission

Proven track record in the investment arena

An independent organisation

Enviable reputation as a DFM and Trustee Manager

Objective decision making regarding asset allocation and choice of fund managers

Highly sensitive to risk and risk management

Highly supportive of both the IFA and their respective clients


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Client portfolios can include alternative investments (diversified) and those that specifically exclude them (traditional)

The client makes these decisions via the risk profile questionnaire

The Investment Manager fully embraces the plethora of fund strategies available in the market place and could not be described as long only

The Investment Manager makes independent decisions about asset allocations and individual managers skills and risk management

Unconflicting use of funds

You are Niche’s client. The DFM will be as proactive with your client as you wish us to be

The vast majority of funds will be accessed at institutional rates

Funds are specifically chosen to add growth, not additional cost

Niche is a DFM managing client money – not a global investment bank (size is not always a good thing!)

Why is Niche different?


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The results of the risk profile questionnaire are fed into the Niche risk profile software and a detailed proposal is produced.

This comprises of four core asset class components, each one accessing expert managers in the following:

Core equity

Core fixed interest

Core alternative

Core property

The construction of the four core components, plus a cash holding, establishes the building blocks for the portfolios.

Percentage weightings are purely defined by the answers provided on the risk assessment questionnaire.

Asset Allocation


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The Investment Portfolios

Asset allocation is the science of adjusting exposure to different asset classes to produce a risk profile that matches the investors particular circumstances.

Niche’s range of seven investment models will cover the majority of clients current and future investment needs.

The example shown on the next page is the Balanced Diversified Portfolio, which has exposure to over 25 individual funds. Furthermore, the actual positions held within each fund can contain up to 150 individual securities ensuring diversification.

Defensive Diversified Defensive Traditional Balanced Diversified Balanced Traditional Aggressive Diversified Aggressive Traditional Alternatives


The Balanced Diversified Portfolio Example

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The most appropriate model for many of our clients, the Balanced Diversified model, has exposure to over 25 individual funds (the holdings within the equity can contain up to 150 individual securities) ensuring diversification.

Equities35%

Cash5%

Alternatives30%

Property10%

Fixed Income

20%

Niche makes a distinction between those portfolios that includes alternative investments (Diversified) and those that specifically exclude them (Traditional).

A client indicating an interest in alternative investments will enjoy access to assets such as;

Student accommodation Life settlements Fine wine Traded endowments Commodities Hedge and currency funds

Alternative investments are designed to offer low volatility with little or no correlation to bond or equity markets

The portfolio above is an illustration of the diversification offered by the Balanced Diversified Portfolio. It is not indicative of the positions that the fund would hold on an ongoing basis, as these positions will change in line with future investment management decisions.


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Performance History

Argyll Equity & Alternative Strategy allocation back tested performance


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Performance History

Argyll Equity allocation back tested performance


Why is Niche the solution?

Risk profiling:

Due diligence of funds:

Asset allocation:

Ongoing fund performance monitoring:

Rebalancing:

Business relationship:

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undertaken by you with your client – using the automated Niche Risk Profiling System

undertaken by the Niche Investment Manager




remains with you and your client


How to Invest in Niche

Once the risk profile questionnaire is completed, Argyll will produce a proposal, which confirms the most suitable model for the client. Following the client’s approval of the proposal, the application process is straightforward for client and advisor alike.

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Key Features:

Available directly, via offshore bonds, platforms, wrappers

Access via SIPPs and SSASs

Monthly dealing

Available in GBP, USD, EUR

Access to alternative investments where appropriate


In Summary

Why use the Niche DFM? De-risks network/your business

Compliance/RDR

Income stream

Strong performance history

More time for you to do what you are good at

Huge diversity of investment choice

Simplicity

Competitive costs

Alternative fund access

Ring-fenced management of your clients

No VAT charged on Service charges

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Any questions?

We believe that we have the right solution for the right environment

at the right time.

Is there anything else that you would require from a DFM that Niche does not offer?

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Who should you, the IFA, talk to?

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The right client profile for a DFM

Clients with larger portfolios

Portfolios that are time consuming

Monies already invested in Offshore Bonds, SIPPS/SSAS' and platforms

Existing DFM Clients, where a change of Manager is due

Clients that are wealthy enough to become litigious

Clients you would like to reduce exposure to unregulated or single asset funds


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For further information please review the Supplemental Scheme Particulars at www.nichefundmanagement.com

Past performance is no guarantee of future performance. The value of investments in the Fund can go down as well as increase and may be affected by changes in rates of exchange. Investors may not get back the entire amount originally invested.

Disclaimer

http://www.nichefundmanagement.com/


The information in this document does not constitute, or form part of, any offer to sell or issue, or any offer to purchase or subscribe for shares, nor shall this document or any part of it or the fact of its distribution form the basis of or be relied on in connection with any contract. Interests in any investment funds managed by Argyll Investment Services Limited (the Manager) will be offered and sold only pursuant to the prospectus relating to such funds and is deemed to carry a high degree of risk and is not suitable for retail investors. The Manager has not taken any steps to ensure that the securities referred to in this document are suitable for any particular investor and no assurance can be given that the stated investment objectives will be achieved. The Fund is not an authorised or recognised collective investment scheme for the purposes of the Financial Services and Markets Act (2000) and the promotion of the Fund is accordingly restricted by law. The Fund’s Prospectus may only be issued in the United Kingdom to categories of persons permitted under the Financial Services and Markets Act (2000) (Promotion of Collective Investment Schemes) (Exemptions) Order 2001. This document is being issued inside and outside the United Kingdom to and/or is directed at persons who are both (a) professional customers or eligible counterparties for the purposes of the FSA Conduct of Business Sourcebook (“COBS”) and (b) of a kind to whom the Fund may lawfully be promoted by a person authorised under the Act by virtue of Section 238(5) of the Act and Chapter 4 of COBS. The investments and investment services to which this document relates are only available to the persons referred to above and other persons should not act or rely on it.

Argyll Investment Services Limited is licensed and regulated by the Guernsey Financial Services Commission under the Protection of Investors (Bailiwick of Guernsey) Law 1987 (as amended). Company Registration Number 36763.

The investment is not subject to the protections of the UK’s Financial Services Compensation Scheme (“FSCS”), nor is it being operated in accordance with UK requirements for the protection of consumers.

This advertisement is not an invitation to make an investment, nor does it constitute an offer of sale. In addition, it does not constitute an advertisement in a country where a fund is not registered for sale. The full documentation required to make an investment, including the Scheme Particulars, is available from the Manager or an Independent Financial Adviser.

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