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Choosing an Investment Manager: a client’s guide

Choosing someone to manage your investments is a tough decision.

Louis Coke


Choosing someone to manage your investments is a tough decision. If you are reading this, you may already be looking at a few different options and unsure which way to turn, or having trouble deciding which attributes to value the most highly between a couple of firms lucky enough to be considered to manage your wealth.

Clients come to us for a number of reasons. Some are unhappy with their current investment manager, some have significant earnings that they are looking to invest, some have inherited funds, and some are trustees looking for a better return on their funds - everyone is different, with unique financial goals and priorities. However, one thing all clients have is common is that they are looking for someone they can trust. An investment manager they click with; someone who will steer their funds through the good times and the bad and help them achieve their financial goals.

Having gone on this journey with a number of new clients over the years, we understand the importance of finding the right provider. This article is designed to provide you with a clear and transparent approach to selecting an appropriate investment manager for your requirements.

  1. Ownership structure
    1. This is really crucial, and often an underappreciated element of choosing an investment firm. Some investment firms are owned by their staff, some are owned by banks and insurance companies, and some are publicly traded on the stock market. Each approach affects the culture of the firm differently, and gives different results. Some clients like the idea of having a large insurance company or bank backing their investment manager for example, whereas some prefer the staff to own all or a significant part of the business for its impact on the company culture.
  2. Fees
    1. Fees for investment management services are usually based on a percentage of the value of your investments with the firm. Typically they start at 1.1-1.2% and fall as the value of your investment portfolio rises. My advice would be not to get too caught up on the level of fees, but rather the amount of value you are getting for your money. For example, an off the shelf ‘model portfolio’ service should typically cost around 0.7-0.8%. At the top end of the scale, a full-blown bespoke service (usually preferred for clients with significant wealth and/or complexity to their affairs) costs around 1.1-1.3%.

      The makeup of fees differs by company with some charging a management fee based on the value of your portfolio, some charging dealing commission and some having a mixture of both. It’s also worth checking if they charge an ‘initial’ fee – i.e. at the outset to set up your portfolio or move investments into their custody.

    2.  What does ‘service’ look like? Each firm will like to look after their clients differently. Generally, unless your affairs are very complicated or fast changing, a meeting once per year is sufficient to give you an update on the portfolio’s progress and for you to tell your investment manager about any changes to your life plans and needs for your funds. Whilst many firms will have something in their rate card about charging for meetings, the vast majority won’t if you are using their bespoke offering– it’s all part of the service.
  3. Investment flexibility
    1. Always look for an investment manager that can invest in lots of different types of investments, such as shares, bonds, funds and property. The more strings to their bow, the more options they have to add value to your portfolio and help you achieve your financial goals.
  4. Size of investment firm
    1. There is no magic answer to this question but in essence, a firm that is big enough to matter but not so large that you become just a number is ideal for most people this writer has encountered. Being part of a larger firm often allows your investment manager greater opportunity to get in front of management teams of the companies and funds they invest in, but that isn’t always the case.
  5. Breadth of service
    1. Offering investment management is one thing, but it is worth knowing what else your investment manager can do for you. Life is complex and over time we find clients need a range of services. Can your investment manager work with (or offer) a financial planner? Can they work with your accountant or legal team? Can they invest for companies as well as individuals? What if you would like to do some philanthropic or charity work. Can they accommodate and help with that?
  6. Testimonials and feedback
    1. Most firms should have a way of collating testimonials from the clients of your particular investment manager. This is vital reading. In the same vein, many firms conduct annual client surveys where they ask their clients, quite simply, what they think of them. The results of this can often be found within marketing literature, company websites and annual reports.

Hopefully the above gives a steer on some of the points that you may not have considered. Choosing an investment manager is often a challenging process and often comes down to ‘soft’ criteria, so a box-ticking approach often isn’t a suitable method of selection.

If you would like to discuss Charles Stanley’s approach to investment management and how we could help you achieve your financial goals, please contact me.


For Charles Stanley’s answers to the questions above, please see the following:

  1. Ownership structure
    1. Charles Stanley Group PLC is listed on the London Stock Exchange under symbol ‘CAY’. Our annual report & accounts can be found here. A significant proportion of Charles Stanley Group are owned by directors and staff, with the remainder held by institutional investors and as free float on the stock exchange
  2. Fees
    1. Fees vary dependent on service required. Please contact me to discuss your exact requirements.
  3. Service level
    1. Annual meetings work very well unless you feel that a meeting more often would be required. In the vast majority of cases, we do not charge for meetings.
  4. Investment Flexibility
    1. Charles Stanley has research capabilities in UK equities, collective funds, fixed interest, structured products, alternative assets and international equities. This puts us and our clients in an excellent place to weather the market conditions over decades to come.
  5. Size of investment firm
    1. We are delighted to oversee some £25 billion of client assets. £13.2 billion of this is under discretionary management (as of 30th September 2018).
  6. Breadth of service
    1. By virtue of our diverse business and history, we look after many types of client including charities, trusts and companies, as well as individuals. We have many clients who have charitable interests which we help to support either by managing funds for charitable causes, or by facilitating charitable giving from portfolios.
  7. Testimonials and feedback
    1. Please see here for the results of Charles Stanley’s 2018 Client Survey. We are very thankful to clients for their kind words and this exemplifies our approach to looking after our clients for the long term. 

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