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Profile: David Aird

Investec Asset Management’s managing director says the fund industry needs to win the trust of customers as consultants rather than using a sales-driven approach and he is looking to the cautious managed sector to achieve realistic returns.

Investec Asset Management managing director David Aird has been getting an earlier train in the morning and a later one home at night since joint MD Andy Sowerby’s departure to Martin Currie.

Aird insists it is business as usual at Investec and that means listening to client needs and responding to them. This client-focused attitude is perhaps not surprising from Aird, who stresses the importance of humility in financial services.

Companies talk about having billions of pounds under management but some of them forget who the money ultimately belongs to. Aird feels the provider/client relationship has been damaged by this attitude and by many providers’ hit-and-run attitude to sales.

He says the damage can be reversed if the industry starts acting with integrity and transparency. Over the past five years, since Aird joined Investec, he has seen fund management companies manufacturing and selling a variety of in-vogue products and he feels the industry is still living with the hangover.

Aird says his firm needs to have a sensible and custodial responsibility to clients to preserve capital and, in some cases, manage expectations down. He feels the days of 10 per cent interest and 15 per cent return on equities are gone.

“We want to impress our clients on an ongoing basis by talking sensibly to them and winning their trust. We do not want to woo them. Trust is an under-used word in this industry.We would prefer our clients to invest in us on a consultative basis rather than on a sales/client basis and that means creating demand from our customers rather than simply going on a sales push.”

Aird says this means listening to clients. Having seen with-profits schemes trap investors in no-growth situations, he has talked with IFAs to find out what they might want from an alternative to with-profits investments. IFAs say clients want a cash/bond/equity mix, capital security and general cautious management and Aird feels this could be well served by investing in the cautious managed sector.

Some so-called balanced funds have placed up to 80 per cent of clients’ funds in equities and Aird agrees with Ron Sandler’s 2001 report that a 50/50 balance between bonds and equities is the ideal balance for investments. With the majority of clients still shellshocked by pension misselling, he believes it is better to be honest with clients and to predict a 5-8 per cent achievable return.

He says: “Even with the market value adjustment, IFAs should consider the cautious managed sector as an option. The least they can do is review the situation with their with-profits clients. It is a question of building familiarity with our products. If IFAs can move client money to get a transparent return with benefits which are aligned with the positives that with-profits used to have, it has got to be beneficial.”

A ird says service is also important. He says he hates automatic call systems and is proud of his response team’s record of answering 99 per cent of calls in under three seconds. When a client asks for a valuation or a commission check, he wants it to be on their desk the next morning and feels such an approach is common sense in maintaining their confidence.

He is philosophical about Sowerby’s departure. He says: “Since Andy’s departure, our business plan is still very much in force and our goals have not changed one iota. This is where having joint MDs comes into its own. Originally, a lot of people wondered how it was going to work. Andy and I both bought into the business, we had a massive input into the structure of things and we set the goals together with our team. We are not in the position of having a megalomaniac MD who makes off-the-cuff decisions.”

Aird is relishing the opportunity to run the business on his own and says that, over time, a degree of his character will be impressed on the business but there are no big changes looming. He is keen to improve his service to IFAs, to continue offering solutions for IFAs and their clients and to attract the best alpha managers in the business.

He also wants Investec to continue creating flexible products for changing market conditions. Aird is looking at products which can perform in all weathers, particularly since the advent of Ucits III regulations, such as using derivatives in a fixed-interest or equity product to dampen the downside if markets fall.

Aird believes the City is full of egos which are not matched by performance and stresses his team’s contribution to the success of the business. “We have got a low threshold for politics here. It is a solid team performance that counts.”

Age: 38
Lives: Suffolk, with wife, 10-year-old son and eight-year-old daughter.

Career: Joined Investec in August 2000 as UK & Europe sales director. Presently managing director. 1999-2000 joined Gartmore to develop first hedge fund strategy; 1992-1998 Fleming Asset Management head of institutional pooled sales in the UK and other offshore areas
Education: Nottingham City University
Interests: Playing rugby, skiing
Likes: Integrity, honesty, loyalty, team spirit, humility
Dislikes: Overinflated egos and misguided confidence
Ambition: “To impress the people I report to and the people who report to me”

Heroes: Warren Buffett and England rugby captain Martin Johnson
Drives: Volvo


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