It’s vital to keep comparing your wealth manager’s performance to its peer group to make sure you are getting value for money and the returns you need to fulfil your goals.
There is a lot to be said for focusing investment portfolios on direct equities and avoiding opaque instruments, explains Andrew Steele, Chief Executive of James Hambro & Partners.
The Hambro family have been involved in the investment world for more than two centuries – they were trade financiers who came from Scandinavia at the end of the 18th century. James Hambro & Partners was launched in 2010 by Jamie Hambro and a small group of us who’d worked together for many years. One of the exciting things about starting from scratch is that you can devise your service the way you want it to be – in our case that meant creating a modern infrastructure that puts the client at the centre. Lots of wealth managers talk about doing that, but if you’re driven by short-term profit targets and a broader corporate agenda and have a legacy infrastructure, that’s often harder than you would like. We look after investments for private clients, families, charities and not-for-profit organisations. We also have a wealth planning arm – James Hambro & Company – so we can offer a full advice and investment management service to individuals. Five years on, how successful have you been? The most important measures of our success are preserving and enhancing client wealth and delivering a good service. I’m very proud of our investment performance – it compares favourably against that of our peers. Assets under management are in excess of £1.7 billion – we’ve grown 160% in the past two years alone and much of this growth has been driven by existing client recommendation. We’re not resting on our laurels, but I think the level of recommendations we’re receiving demonstrates that we’re delivering on our service promises too.
Our clients are HNW and UHNW individuals, families, trusts and charities. They’re a mix of UK-based and international clients – ranging from successful entrepreneurs to those who have inherited wealth, sometimes through marriage.
We start by listening. We have to understand and capture a client’s needs and objectives. Some investors have a high return target that means taking on quite high risks, others prefer a more gentle approach. It’s all about personalities and needs, which is what makes the job so interesting, frankly.
We’ll recommend a portfolio designed to achieve their objectives with the least risk possible. It may include a range of asset classes like bonds, gold, property and absolute return funds, but it is likely that global equities will be core. Over the long-term equities have been shown to best achieve our targets of preserving and enhancing wealth. They remain our favoured asset class and one in which we have particular expertise.
We are distinctive in building portfolios with a significant proportion of direct equity holdings, which can help reduce costs. We keep things simple – we don’t use complex financial instruments that can be opaque and have hidden risks.
Finally, we share our data with organisations like ARC and Enhance that measure us up against our peers. I think it’s important for clients to have objective tests of performance, and we’re not afraid of comparison. In fact, given our investment returns for clients over the past five years, we welcome it!
We know that clients want to be able to pick up the phone and talk to the person managing their money. We encourage that, so we don’t have relationship managers. We have teams – a primary and secondary client portfolio manager, an assistant portfolio manager and a personal assistant. Clients have direct access to the team managing their money. All of the team will know the client and be able to answer their questions and help. We ensure that teams have sufficient capacity to be able to speak to clients.
We also of course offer secure online reporting and quarterly valuations and share our investment outlooks too. So there is a lot of client communication.
Beyond performance and the direct access to investment teams, I think we’re also distinctive in that we have a very close relationship with the award-winning equity house J O Hambro Capital Management, which manages over £18.9bn of assets across a range of funds and segregated portfolios, with expertise in UK, US, European, Asia ex Japan, Japanese, Global/International and Emerging Markets equities.
Senior members of JOHCM are equity partners in our business and sit on our Asset Allocation Committee. They regularly exchange insights and knowledge with our own investment managers to enhance our mutual understanding of markets. The alliance helps us to gain greater access to the management teams of companies in which we invest.
I think that’s been instrumental in our success. We’ve been able to offer the quality of service you get from a boutique wealth manager, but with the expertise and access that you might normally only associate with bigger firms.
Beyond that, I think it’s important that this is an independent, partnership business – that structure has enabled us to focus on the client, not a parent company, and it helps us attract and retain talent. It’s one of the four-Ps that we say is fundamental to success: Partnership, People, Process and Performance.
If you’d like to start a conversation with James Hambro & Partners please contact the Find a Wealth Manager team HERE. They will ensure you get direct access to the investment professional who matches your profile.