Credo Wealth is proud of an investment process which shuns short-term fads and of taking a holistic view of its clients’ financial wellbeing. The result has been impressive organic growth.
Duncan Stratford, Head of UK Front Office at Canaccord Genuity Wealth Management (UK and Europe), explains his firm’s approach to serving a wide range of clients with very different needs.
Canaccord Genuity Wealth Management is a wholly-owned division of Canaccord Genuity Group Inc., which is a global investment business listed on both the Toronto and London stock exchanges. The group was started in the 1950s and is a leading financial services firm operating in wealth management and capital markets.
The UK and Europe wealth management businesses were established through the acquisition of Collins Stewart and Eden Financial in 2012. The firm now has offices in London, Guernsey, the Isle of Man and Jersey through which it manages over £11bn of assets on behalf of 12,000 clients, providing the full range of wealth management services.
The range of services on offer to all our clients is comprehensive, from bespoke discretionary portfolio management, to execution-only, advisory stockbroking and our own funds. We also offer wealth planning and tax advice, either on a transactional or on a more long-term, strategic basis. We can arrange short-term lending through third parties. Clients can engage with us on the service or level that suits them best and we are happy to review their needs as they change over time.
Given that we look after over 12,000 clients and treat each as an individual across our network of offices, we do not have a typical client profile. With clients of all ages in different circumstances, we have structured our services to accommodate a wide set of requirements. Less complex clients with more moderate portfolios may be better suited to our efficient model or funds selection, whereas our more sophisticated and complex clients can take full advantage of the wider range of services including offshore and structured products. We pay great attention to ensuring the investment outcomes of each client are tailored to them and we strive to deliver their objectives.
Our focus on risk, and recognition that asset class correlations can and do change over time, naturally leads to an emphasis on asset allocation as the primary driver of investment returns. Risk-reducing assets held during periods of financial stress will serve to moderate the losses which might otherwise accrue, and consequently, it is felt that it is the Asset Allocation Committee of CGWM which is best placed to lead any decision to alter the risk level of client portfolios.
However, CGWM also believe that there is potential for value to be added at every stage of the investment process, notably in the discipline of security selection. It is evident that portfolio construction can also have a significant impact on a portfolio’s risk and return characteristics. It is entirely possible to increase, or moderate, a portfolio’s risk by altering how the asset allocation is represented; asset allocation is not the only lever which is available to us. Consequently, the asset class committees are structured and tasked with maximising return for a given level of risk. The ability to generate alpha – effectively excess return over the compensation for the risk borne – is anticipated, which will serve to further enhance the risk and return characteristics of client portfolios. With these tools the individual portfolio managers are able to tailor client portfolios within the risk parameters that the clients have set and will generate the type of return (e.g. either income or capital) as is required by the clients’ or portfolios’ individual requirements.
Each client portfolio is monitored for adherence to the investment process in terms of client objective, asset allocation and individual asset selection formally by the Portfolio Measurement and Monitoring Committee (PMMC) on a quarterly basis. In addition, the overall level of risk that the portfolio is taking is quantifiable and compared to both the specific risk level that the investment process deems appropriate at that point and the level or risk that the client is comfortable in accepting. Portfolios can be reviewed at any point on this basis, as well as being formally reviewed by the PMMC each quarter.
Our dedication to serving our clients with integrity and transparency is core to our company values and drives our culture and processes. Our clients are encouraged to have as much contact with us as they wish – for some it is more frequent than others, but we are diligent in our responsibility to look after our clients as best we can and that requires us to keep our records up to date and to document every point of contact with every client. Clients may be looked after by a single individual or a team, if preferred. No client is left unattended and there is cover and succession planning in place to cover all eventualities.
We communicate with clients using a broad array of channels, from vital face-to-face to email and using our Wealth Online service, whereby clients can review their portfolio 24/7. All clients receive detailed quarterly or half-yearly portfolio reports that give a review of their portfolio and transactions over the period. Some attend our seminars and events; some prefer our more social engagements.
Canaccord Genuity Wealth Management is distinctive for a number of reasons. As we are part of a global investment business we have access to expertise and support from a global infrastructure which helps to set us apart, coupled with our proprietorial tools such as Quest ® which informs our centralised investment process. With input from around the business, our governance and collaboration is key to the delivery of successful investment outcomes for our clients across the board. Our investment philosophy and process takes on risk analysis throughout the stages as we assess the decisions to be made regarding asset allocation and portfolio construction. We have innovative products such as ‘REMAP’ and our IHT portfolio service, to help deliver the right outcomes for our clients, whether reduced tax, capped volatility or more growth is the desired result.
Our onboarding process and suitability review process ensures we are focused on bringing an important level of engagement between clients and their wealth. Whilst some clients may wish to have their portfolio managed on a discretionary basis, we still work hard to take clients through the right profiling and risk analysis reviews to make sure they are fully aware of how their wealth is being managed, whether they are actively engaged or more passively involved.
We host seminars and provide publications such as our monthly Intelligent Investing newsletter and our quarterly News & Views magazine to help clients stay up to date with our current thinking. Our Wealth Online service allows clients to review and monitor their investments as often as they wish and the paper-based quarterly portfolio valuations are distributed with our market commentary and details of the clients’ transactions and charges for the period. Clients are encouraged to have an open and trusting relationship with their dedicated investment manager who can guide them through the decisions and changes made to their wealth with a clear, mapped-out plan for the future.