When David Stone, Partner with Mansion House Capital, signed up for FE Invest some 18 months ago he gained the means to be able to demonstrate the ‘why’ and the ‘how’ of portfolio selection decisions they were making.
When your client demographic is young (around 40), professional (typically bankers and lawyers) and financially literate it is particularly important to be able to demonstrate the ‘why’ and the ‘how’ of portfolio selection decisions you are making.
When David Stone, Partner with Mansion House Capital, signed up for FE Invest some 18 months ago he gained the means to do just that, inspiring greater confidence in his clients and satisfying Compliance requirements to boot.
Mansion House Capital (MHC) is a small firm of financial planners, established in 1999, and advising on a range of planning from mortgage advice through to more complex tax-based Investment advice. With one or two corporate exceptions, MHC’s client base is made up of professional individuals, mainly bankers and lawyers, who are, as David says, “financially literate”.
David Stone’s relationship with FE began around five years ago. Operating as part of the Blueprint Group then, he began to use FE Analytics to replace the time-intensive process of trawling through the financial press to identify the best funds for inclusion in his investment portfolios. He used other services such as Defaqto - and also looked at Morningstar as a possible provider but felt that for MHC, the latter’s service was overkill, offering much more data than they would ever need. He has therefore continued to use FE Analytics, as it provides “just the right level of information.”
He uses FE Analytics for research when preparing for meetings with new clients - and to track existing clients’ portfolios. It is this latter facility that he uses most frequently. He has been particularly impressed by FE Analytics’ capabilities in compiling client documentation. David runs a number of passive portfolios and uses FE Analytics to perform the due diligence on these.
“We can use FE Analytics for a reasonable cost and even though it is not relevant to all of our business, we use it often enough to justify the expenditure. It offers everything I need in one place and I can trust it: everyone knows FE Analytics and it has a good reputation in the market,”
In February 2014, MHC also took out a licence for FE Invest, a comprehensive portfolio management service that incorporates a suite of actionable, risk-optimised portfolios that can be fully customised to meet the widely differing range of investor risk profiles.
Blueprint had an Investment Committee of which David was Chairman. The Committee ran a series of active and passive portfolios. In March 2012, Blueprint was acquired by Intrinsic and it was decided in the run up to RDR that this was no longer practicable. David now runs his own portfolios with the help of FE Invest.
With a potential field of around 4,000 different fund managers to speak to before deciding which funds to include in his portfolios, this was a huge task. Now, FE Invest does all of the legwork for him, presenting him with a suite of portfolios to suit all risk appetites.
For David, the main cost of managing the portfolios was his time; the research was laborious and time-intensive. Now, he says:
“FE Invest does it all for me – and it does it very well.”
More importantly, when he presents his portfolios to clients, he can demonstrate that by outsourcing to FE, he has a methodology to support the approach he is taking and can prove he is working to a recognised, repeatable and compliant process; a process that is totally transparent. This makes the task of convincing clients that he is putting forward reliable fund selections that much easier; the evidence is there for them to see.
“We have a story to tell; clients want to know how we arrive at our recommendations. Having outsourced this process to FE, we can demonstrate this to them. Our clients get it. They’re very happy with it. FE Invest gives us more credibility – and that’s important, particularly given our client demographic and their high levels of financial literacy.”