Profile: City Financial’s Peter Toogood on paying for market bubbles


Fund data has come a long way since City Financial investment director Peter Toogood started out in financial services.

When he began working as an adviser for wealth manager Holden Meehan in 1989, all he had to go off was pages and pages of fund lists with some performance statistics thrown in for good measure.

He says: “In the old days you didn’t have anything to play with. I remember going through the fund books as an IFA and just thinking: ‘I can’t believe this is all I’ve got’. You were just chasing performance numbers and the fund lists were your bible.

“But that didn’t give any colour to funds. What I actually needed to know was what asset managers were doing, why were they different in how they run money, what their timeframe was and the way they think about investing.”

Toogood has played a pivotal role into making investment research what is today. After five years at Holden Meehan he went on to join fund of funds Forsyth Partners, working his way up from senior mutual fund analyst to chief investment officer. In charge of traditional and multi-asset funds, at the peak he was responsible for assets in excess of £1.5bn.

In 2002 he co-founded the original Forsyth-Old Broad Street Research Ratings Service, known as OBSR, now an established heavyweight in the fund ratings space. Forsyth Partners went into administration following the loss of its Dubai arm’s licence. When Forsyth Partners was later acquired by Crosby Capital, Toogood moved across to OBSR as investment director in 2008. The business was acquired by Morningstar two years later.

Having joined City Financial in 2013, Toogood is now preoccupied with his latest venture: The Adviser Centre, which he launched with former OBSR colleagues Gill Hutchison and Anthony McDonald. The online research and consultancy service is aimed at advisers and offers in-depth fund research via its recommended, established and positive watch fund lists, as well as Investment Association sector overviews and market commentary.

18 months after The Adviser Centre’s launch, 800 advisers have registered as users of the service.

Toogood says it is not about creating another “fund rating piece” but combining the research features of The Adviser Centre with the investment expertise of City Financial. As the service covers just 135 funds, he says the approach is much more investment-led rather than rating-led.

“What we wanted to do is to put the whole consulting piece online. We give specific guidance on particular product so it is not just a rating tool. It is about giving advisers a feel of what’s going on in the market.”

The next stage of The Adviser Centre’s evolution is the launch of a discretionary fund management service, what Toogood calls “a natural extension” of the existing offering.

“We are currently pursuing a variety of different options with partners to deliver the service. Our confidence in entering this area is based upon our previous experience.

“As a fund manager, we are already connected to distribution by being on platforms. To connect the pipe into a DFM is relatively simple because we have already got the structure in place. That’s not particularly challenging.”

The plan is to use City Financial’s existing relationships with Nucleus and Standard Life to help with distribution.

Toogood says City Financial has enough scale to build up The Adviser Centre, with the multi-asset team now managing £400m.

As for City Financial, the company is looking to expand its multi-asset fund, and is “active discussions” with firms looking to sell their multi-asset portfolios.

Toogood says when it comes to investment advice it can be challenging to understand what stockmarkets are doing, implications for capital loss and choosing one asset class over another.

“Bonds might be very expensive now but who is supposed to be the one to say that, and actually who really knows? Who is the arbiter to test whether it is a good decision to make that allocation or not?

“Asset allocation is never going to be simple because otherwise the message would be: ‘If you have the right mix of assets and you just presume capitalism doesn’t die it all should work’.”

As someone charged with helping advisers make sense of the markets, and particularly given the level of volatility we have seen of late, Toogood admits the macro environment right now is a challenging one.

“The most amazing monetary experiment in recorded history has been quantitative easing. In our lifetime central banks have had $1trn to $2trn in their accounts in terms of what we call investments, including government bonds. Central banks now have $22trn. Our entire industry is $29trn so suddenly, out of nowhere, the biggest players in the market are central bankers.

“All the rationale and what we understand about valuations, policy and macroeconomics is driven by when Janet Yellen or Mario Draghi open their mouths. Look at what happened when Draghi said ‘off we go on QE’, the European stockmarkets spiked.”

Toogood points out that as the previous round of QE lasted from 1947 to 1962, the current EU programme could be set to continue for much longer. With growth also lagging in the US, he says we could yet see the world’s largest economy return to asset purchase as well.

“Everyone is pricing the world like you can have another bubble. But we haven’t paid the last one yet; in fact, we’ve added to it.

“We now have $100trn in global debt. In 2000 it was $22trn. That is a large amount for debt to increase by when ultimately debt is just taking consumption from tomorrow and bringing it forward to today.”

He believes there are more market challenges to come, and while all eyes are on China, he says the Greek crisis is “nowhere near done”. He says Greece is a clear example of why the Euro project is set to struggle.

“If anyone thinks a little belt tightening was the answer for Greece, it is not in any form whatsoever. That’s because it doesn’t deal with the main issue, which is that Greek debt is so monstrously expensive it cannot be dealt with.

“The hope would be they address the fundamental problem – that the debt to GDP ratio is just ludicrous in an economy which is basically imploding.”

Five questions

What is the best bit of advice you have received in your career?

Successful businesses are created from thoughtfully-constructed products and services that address and overcome issues, rather than add to the noise.

What’s keeping you awake at night?

The RDR continues to rumble through the advisory market. As the sunset clause approaches. The biggest issue for advisers is the legacy client.

What has been the most significant impact on financial advice in the past year?

The sheer scale of interference in asset markets by the authorities is truly breath-taking. It will end in tears.

If I was put in charge of the FCA for a day I would…

Try to bring more clarity to the advice given by the FCA.

Any advice for new advisers?

Client relationships based on trust can last a lifetime. If they trust you, they will refer you.


2013-present: Investment director, City Financial

2008-2013: Investment services director, OBSR Morningstar

2000-2008: Chief investment officer, Forsyth Partners

1994-2000: Senior mutual fund analyst, Forsyth Partners

1989-1994: Financial adviser, Holden Meehan