View more on these topics

How advisers invest: ‘If it’s beneficial to clients, it’s good for business’

Thomas Miller Wealth Management managing director Matt Phillips on how a little bit of cynicism does not hurt when it comes to fund selection

Do you outsource investment management, do it in-house or combine both approaches?
We combine both approaches. If you look at our assets under management, the split between our wealth management business and in-house discretionary business is broadly half and half.

Our investment process starts from our independence – we don’t use any of our own funds. Instead we use open architecture. To think that we have the answers to everything in-house is not right.

What investment options do clients have?
We provide clients with end-to-end wealth management, starting with identifying their risk and return profile. They then go on a journey with us, investing in our model portfolios if suitable. Our in-house discretionary business is predominantly model-based.

However, some clients have specialist needs – they may have large capital gains issues or “rag, tag and bobtail” investments, so will need something other than our structured models.

Investment Uncovered: Wingate Financial Planning: ‘We’re proud to be style agnostic’

Some might have accumulated shares and selling out of them to move into the models may not be appropriate.

We think it’s right for those clients to have something bespoke.

What DFMs do you use and why?

The main one we use is Brooks Macdonald because we think the service is very good.

What we like when looking for DFMs generally is a clear process with a disciplined and vigorous approach so that results are repeatable. We’re increasingly not interested in star fund managers or fund managers unable to tell us how and why they perform the way they do. We are looking at it from the viewpoint of what they expect to happen.

We also use Quilter Cheviot, which is more disciplined and “old school”. When we choose DFMs we are looking for something that fits together well but which will be different. We are not looking to buy expensive quant traders, as what value would we add to clients if that was the case?

Our DFM panel is reviewed annually by members of our wealth management team, which includes members of our management and the investment team.

What platforms do you use and why?

We use platforms on the retail side of the business. A lot of what we do is sitting on SEI, which we use as a custodian. For example, we might have clients who have a Sipp with AJ Bell and we will hold it on SEI. We also use Standard Life as the minimum investment level is smaller.

Although our core client base is £250,000 and upwards, we also want to deal with clients who do not have that level of wealth. For those clients we have started to use Standard Life’s MyFolio range and some of our own models as well. We use the Standard Life platform as a one-stop shop – it’s easy when doing a lot of Mifid II reports for clients, for example.

We review the platforms annually but we’re unlikely to propose changes unless they become uncompetitive in terms of the administration or costs.

How are funds selected for your model and bespoke portfolios and what would trigger a change?

I am a little bit of a cynic. What I see far too often is people in the industry sitting in front of me telling me one thing and expecting me to forget it by the next quarter. Recently, two fund managers in an organisation told us two different things about that organisation in meetings. If I was the chief executive, I’d be concerned about the facts they were putting to the market.

We take a pragmatic approach to selecting funds and making changes. We have a team of four people who run them on a database and we buy funds that we feel can do a sterling job over the long term, looking at risk and volatility.

Investment uncovered: How IFA Newell Palmer invests

Lower-risk portfolios will hold fewer equities than our higher-risk buckets. We use a mix of active and passive funds, and are very comfortable using passives almost as a default for US, UK and European equities. When we’re picking active managers, we look for a good long-term track record.

We review funds monthly and make changes if there are changes to their parameters, where a fund manager leaves and they are important to the investment process or if a fund is not meeting expectations. If we wanted to be in a different market we would also sell funds or part our holding to meet asset allocation requirements.

Finally, how does your investment approach benefit your clients and the business?

We have a strong belief that if it is beneficial to clients, it is good for business. It may sound trite and a bit of a cliché but it is always good for business if you put clients first. We have a seamless solution for clients as portfolios are managed by us and financial planners are at the top in the client relationship, finding out from clients what their objectives are, what they want to achieve and why they are investing.
Because we are independent and have no compulsion to go in-house, clients know that if something is more suitable, that is what we will use. If we’re not trustworthy, we don’t have a business.

Fact file

Date company established: 1988

Assets under management: 0.5bn in-house discretionary business, 0.5bn with DFMs, £200m offshore, £3.5bn for institutional clients

No of staff: 83

No of clients: 1,500 UK retail clients, 1,600-1,700 institutional clients

Platforms used: SEI and Pershing on retail side, Bank of New York Mellon on institutional side

DFMs used: Brooks Macdonald, Quilter Cheviot, Standard Life



Treasury tipped to cut pension tax relief to fund NHS spending

Chancellor Philip Hammond is expected to announce cuts in the Budget to pensions tax relief to help fund the NHS. The Telegraph reports a senior Treasury source has confirmed tax free contributions will be stripped back to unlock the extra cash for healthcare. In June the government promised to spend an extra £20bn annually on […]


SJP rings in board reshuffle as chair steps down

St James’s Place chair Sarah Bates has stepped down from her role today with current risk committee chair Iain Cornish taking over her position. SJP announced the departure in May, saying Bates will retire after 14 years with the firm and four in the position of chair. Cornish’s vacancy will now be filled by executive […]


Platform tech firm FNZ valued at £1.6bn as stake sold

HIG Capital has sold its stake in platform tech provider FNZ in a deal valuing the company that powers some of the UK’s largest platforms at £1.65bn. Institutional investor La Caisse de dépôt et placement du Québec and Generation Investment Management will acquire holdings in the business. The deal is subject to regulatory approval and […]

Tapering of annual allowance – adjusted and threshold income

The definitions of adjusted income and threshold income used to determine whether, and to what extent, someone’s annual allowance will be reduced can be confusing.  Here we try to make sense of it all. The annual allowance will be reduced for high income individuals from 6 April 2016.  Our previous article Tapering of annual allowance […]

Can you put a hat on?

By Sarah Scott, marketing consultant You might think the question in the title is a strange one. Perhaps even more so when you learn that it’s one of several asked as part of an assessment for Employment Support Allowance eligibility in the opening scenes of the 2016 film, ‘I, Daniel Blake’. Daniel is a carpenter […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm