For professional advisers. Valuing partnerships. Bespoke portfolios for your clients

Transcription

1 For professional advisers Valuing partnerships Bespoke portfolios for your clients

2 Our approach At Brooks Macdonald, we aim to enhance our clients wealth through the provision of our investment solutions. We seek to build trusting relationships founded on the professionalism of our people, who are selected for their analytical skills, outlook, drive and ability to relate to clients. Our employees have allowed us to instil a culture that supports consistency in every aspect of our business. Together with our transparent investment process, this allows us to partner with professional advisers to complement their services and benefit our mutual clients. These include private investors, trusts, charities, pension funds and institutions. About the Bespoke Portfolio Service Our Bespoke Portfolio Service (BPS) is designed for clients who want an individual investment portfolio constructed to meet their specific requirements. As this service is discretionary, it enables clients to delegate the day-to-day buy and sell decisions to a qualified investment manager, whose expertise is complemented by a team of in-house specialists. Each team is led by one of our senior investment directors and supported by our investment and asset allocation committees. Investing in our BPS allows clients to benefit from active investment management using Brooks Macdonald s centralised investment process, research capability and portfolio risk monitoring. 4

3 What our Bespoke Portfolio Service offers Proven active investment process Our well established, centralised investment process combines strategic and tactical approaches to asset allocation with vigorous individual security selection. It is designed to identify the best investments in their class, and has been proven to add value for our clients. Consolidation of assets We are able to consolidate assets held across multiple wrappers and providers into one portfolio managed on a combined basis, if the client and their adviser wish. Wherever possible, we will hold the most appropriate asset in the correct tax wrapper to utilise available tax efficiencies, e.g. income-producing assets in an ISA. Effective risk management We have embedded qualitative and quantitative proprietary risk controls into our investment process, while ensuring that adequate portfolio diversification is achieved by investing in a wide range of traditional and alternative asset classes. Long-term strategic planning We are able to strike the delicate balance between meeting the client s income requirements, while preserving capital to protect their income source over the long term. Income generation in retirement We aim to meet the specific income needs of retired clients, and can control the amount and timing of payments, while utilising tax efficient strategies in accordance with the adviser s cash flow strategy. 5

4 ISA management We can utilise fixed interest and high yielding assets within the client s ISA wrapper. We also offer a rolling ISA subscription service, whereby we will fill the clients ISA with funds from their taxable private account each year, if instructed to do so by their adviser. Phased investment We can spread the initial investment of the client s capital over a period of time to reduce the risk of market timing and to benefit from pound cost averaging. Lower fees Tax consideration We are able to consolidate and manage assets on a household basis, if instructed by the adviser, allowing us to take full advantage of a couple s annual Capital Gains Tax (CGT) allowances by transferring assets between them. Comprehensive reporting By holding assets with one discretionary investment manager, reporting becomes efficient and concise, enabling the client and their adviser to see how all the client s assets are performing via a single report. The more assets the client has with one provider the more opportunities to reduce management, administration and transaction costs. 6

5 What we do for advisers and their clients Initial proceedings One of our investment managers will meet with the client and their professional adviser to discuss the client s circumstances. We can provide a critique of a client s existing portfolio upon request. We will produce a customised investment proposal document that outlines how we intend to manage the client s portfolio. We will organise the administrative and legal requirements of setting up the portfolio. Whenever necessary, we will organise further meetings. Once the client s account is open Team structure Access to a personal team composed of an investment team director, investment managers, business development and executive support staff. We ensure that there is always a member of the client s investment team available to talk to, for either the client or their adviser. Research We conduct sector research. We compile and monitor buy / sell / hold lists. We analyse internal and external research to determine our asset allocation strategy. Management of an individual financial position (where appropriate) We manage cash and liquidity. We promote tax efficiency. We can formulate and deliver an individual income strategy. We can account for particular events (e.g. change of family circumstances, management of group / family accounts). We offer the opportunity to invest in our AIM Portfolio Service. We have the ability to phase the initial investment to avoid adverse market timing and to maximise opportunities for returns. We have an automatic ISA facility. Rebalancing We ensure that each portfolio is in line with our asset allocation strategy. We monitor the performance of individual investments. We assess portfolio performance compared to an agreed industry benchmark. Risk monitoring We provide constant evaluation of risk from a macroeconomic perspective and the client s personal view using our risk management system. 7

6 Application process Adviser Assets from fact the find whole and suitability collective assessment universe Typically, the adviser will be responsible for assessing that the service is suitable, which includes helping the client to determine their investment objectives and risk tolerance. A portfolio critique service is available, if required. Brooks Macdonald investment proposal The adviser will contact Brooks Macdonald s investment management team to request an investment proposal. This sets out how Brooks Macdonald intends to manage the portfolio given the investment mandate provided by the adviser. Client introduced to their Brooks Macdonald investment management team The adviser will arrange an initial meeting to introduce the client to their personal investment management team to discuss the investment proposal. The meeting is an opportunity for the client and their adviser to understand how the portfolio will meet the client s investment requirements. Assets Application from the whole collective pack universe When the client and their adviser are satis fied that the investment proposal meets the client s investment requirements, the client will be asked to complete an application pack. Upon receiving the completed pack, we will start the account opening process and send the client a welcome letter. Account opening The client s money will be transferred to Brooks Macdonald either from an existing provider or from a bank account. If the money is coming from an existing provider, we will liaise with them to ensure an efficient transfer. A completion letter will be sent to the client, which includes an access code for our online portal. 8

7 Client communications Cooperation We hold review meetings when requested by the professional adviser. We work in conjunction with the client s professional adviser, solicitor and / or accountant. Reporting We compile tax packs. We provide quarterly valuation reports. We provide quarterly market overviews. We have an ad hoc reporting service. Online portfolio Access to our Brooks Macdonald client portal, which enables the client and their adviser to view their portfolio positions and performance at anytime. Web valuations are provided on a daily basis via our portal. General communications We publish topical blog posts. We provide ad-hoc communications during times of market turbulence. We make courtesy calls, if agreed with the professional adviser. Case study Capital Gains Tax management (based upon current prevailing UK income tax and CGT rates) Five years ago Mr and Mrs Parnell invested 500,000 which has grown by 5% each year since and is now worth around 638,000. They now wish to sell all of their investments to purchase a property for their three children. As higher rate tax payers, Mr and Mrs Parnell must now pay CGT on the c. 138,000 realised profit. The current higher rate CGT is 20%, however they both receive a CGT allowance of 11,100 each, therefore 22,200 of their combined capital growth is not taxed. The remaining c. 115,800 is taxed at the higher rate of 20% which equates to around 23,200. However, if Mr and Mrs Parnell had invested with an active discretionary investment manager (such as Brooks Macdonald) who had used both of their annual CGT allowances and their ISA allowances each year their tax on the profit would be reduced to around 3,400. This saving has been achieved by utilising their CGT allowances in each of the five years and additionally their ISA allowances at the outset and then in each of the five subsequent tax years. By doing this continually, rather than just using their CGT allowances at the end of the period, they have saved around 19,800 in tax. 9

8 New Business Development Team Edinburgh T Manchester T York T London T Leamington Spa T Hampshire T OX Taunton T GU Tunbridge Wells T

9 Fees Implicit in our ethos is our long-standing aim to take a clear, fair and honest approach to everything we do; this is reflected in our fees and charges. Fees charged are based on a percentage of the value of each portfolio. This aligns the interests of the client and Brooks Macdonald over both the short and longer term. Our annual management charge is calculated quarterly and taken against the value of the client s portfolio at the end of March, June, September and December. Charge type Typical fee Plus VAT Initial charge Negotiable Annual management charge (AMC) First 1m 0.75% 1m - 2.5m 0.60% Thereafter 0.50% Dealing charges (UK) First 10, % 10, , % Thereafter 0.11% Dealing charges (overseas) First 10, % Thereafter 0.15% Administration charge per transaction Charged assets held in our nominee 15 Level of interest paid on cash Onshore 0.40% below BoE base rate ISA charges* First 30, % Thereafter 0.10% *Our ISA charges, which are in addition to the annual management charge, are calculated on a six-monthly basis and taken against the value of the client s ISA portfolio as at the end of June and December. 11

10 CONTACT US If you would like to learn more about any of our services or products please contact us: Brooks Macdonald 72 Welbeck Street London W1G 0AY T: E: W: Important information The value of your investments and the income from them may go down as well as up. You may get back less than you invested. Past performance is not a guide to future performance. All data provided by Brooks Macdonald as at , unless otherwise stated. Brooks Macdonald is a trading name of Brooks Macdonald Group plc used by various companies in the Brooks Macdonald group of companies. Brooks Macdonald Asset Management Limited is authorised and regulated by the Financial Conduct Authority. Registered in England No Registered office: 72 Welbeck Street London W1G 0AY. More information about the Brooks Macdonald Group can be found at