Tatton Managed Portfolio Service A more efficient way to invest

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1 Tatton Managed Portfolio Service A more efficient way to invest Tatton s discretionary portfolio management service combines our investment expertise with platform technology and your adviser s in-depth knowledge of your aims

2 Tatton makes discretionary portfolio management accessible Tatton Investment was built around the idea that, by managing your money through large UK investment platforms, we could make discretionary portfolio management accessible for more investors. We understand your investment aims because we build on the plans you have drawn up with your financial adviser. We aim for the best possible returns for your chosen level of risk by making long term, diversified investments in regulated investment funds. We work to keep your investments on track our experienced team continuously monitors and adjusts your portfolio to ensure it remains aligned to your chosen risk profile. Our charges are below average because we leverage platform technology and your adviser s analysis of your aims. You retain full access to your money and you can take back control at any time on your chosen UK investment platform. We continually manage your portfolio to keep it aligned to your objectives Lothar Mentel, CEO Discretionary portfolio management explained Discretionary portfolio management is a service in which ongoing buy and sell decisions for a client s account are made by a professional investment team. At Tatton, this means that we continually manage your portfolio to keep it aligned to your investment objectives. Until recently, this kind of continuous and disciplined portfolio management was only available to the clients of expensive private banks. Tatton Investment Management 2

3 Your financial goals Financial plan Developed with your adviser Your Tatton portfolio Tatton offers discretionary portfolios that cater for a wide variety of risk levels and investment objectives Towards meeting your financial goals Portfolio rebalancing We adjust investment selections whenever necessary, aiming to avoid those that become over-valued Analysis Tatton continually monitors your portfolio and the global economic situation Investment platform technology helps us keep ongoing charges low We manage over 4.4bn for UK individuals, trusts and pension funds Tatton Investment Management was founded in 2012 by experienced investment manager Lothar Mentel and Tatton Chairman Paul Hogarth. We help a wide range of private clients, trusts and pension funds to manage their investment portfolios to meet their financial goals. We are the largest on-platform-only discretionary investment manager in the UK, with over 4.4 billion under our management (October 2017). We are based in the City of London and regulated by the UK s Financial Conduct Authority (FCA). Tatton Investment Management 3

4 Your adviser knows you best Your financial adviser has met you and discussed your financial goals in detail. Our investment approach builds on that solid foundation. At Tatton, we believe you should only invest having considered a range of options and having taken sound advice from someone who understands your needs and the many kinds of investment available. That understanding and advice has to come from your financial adviser. Your adviser focuses on your needs A financial adviser will discuss with you the aims of your investments, the size and timescale, and your personal and financial capacity for taking the risks that come with achieving investment returns. Then they can help you choose what kind of investment will meet your needs. Traditionally, you might then meet your financial adviser every year to check your investments are performing as they should. The great advantage of using the Tatton Managed Portfolio Service is that we can monitor your investments every day and react quickly if things change. We focus on managing your chosen investments Tatton offers a wide range of investment portfolios. You can choose where in the world you d like your money invested and in what kinds of assets, and you can opt for portfolios with a wide range of growth prospects and risk profiles. There are also decisions to be made about which of our risk rated portfolios and styles of investment are right for you. Your adviser s understanding of your investment goals will help you make these decisions. But once you have chosen Tatton, you can be sure that we are busy with our side of the deal: always managing your investment for the long term, and keeping it in line with the risk profile and objective that you and your adviser have decided on. Delivering value for money Our platform-based portfolio management and the large sums we manage help to keep our costs low, and we pass on the savings to you. We charge fees for the Tatton Managed Portfolio Service based on a percentage of your portfolio s value. There are no dealing fees, though there are underlying fund costs of different levels, dependent on the specific investment style of your portfolio. Your financial adviser will discuss with you which approach to investment is most suitable for you. We aim to have a transparent and competitive fee structure, so that you, your financial adviser and the team at Tatton are all working towards the same goals. Please note: Although Tatton does not charge dealing fees it is possible some platforms will apply dealing fees to portfolio transactions we initiate. Please see the discretionary management agreement and the appropriate portfolio fact sheet for full details of fees and charges. Tatton Investment Management 4

5 A prudent way to grow your money At Tatton, our aim is to deliver the best possible returns while ensuring that your portfolio never deviates from the risk profile that you choose. Guardianship is key to the way that the Tatton Managed Portfolio Service looks after your money. This means that: We seek to deliver solid and sustainable returns over the long term. We avoid leaving your money in assets that become trendy and through that over-valued. We ensure your portfolio never leaves the boundaries of the risk profile you have chosen. Investing for the long-term In our experience, taking a long-term, considered approach to managing investments is more likely to add significant value to clients portfolios. We have found that this tends to outperform aggressive managers who may try to bet on the latest trendy asset classes. Sticking to your goals At Tatton, we monitor your portfolio every day to check that it remains at the risk level that you and your adviser have chosen. In fast-moving markets, previously safe investments can quickly become much more risky, and our team is always ready to rebalance your investments to avoid overvalued assets and keep your portfolio on track. Low fees improve your returns Jim Kean, Head of Investment In the past decade, investment returns have, on average, been much lower than in preceding years. In years gone by, strong returns meant investors hardly noticed high annual management charges. But that is no longer the case. For example, consider a single lump sum investment of 10,000 that realises a return of 7% per year, for 10 years. If the fund manager of that investment charges 2% per year, then that investment will have grown to 16,100 when the ten years are up. But, if the fund manager s fee is only 1% per year that 10,000 will have grown to 17,800. In this example, a 1% decrease in the annual management fee adds up to a significant 10.5% increase in the final return to the investor. The growth rate used is for illustrative purposes only and is not guaranteed. The actual rate of return achieved may be higher or lower. You may get back less than the amount invested. Tatton Investment Management 5

6 Tatton offers a wide range of portfolios At Tatton, we don t force your investment into a limited selection of standard options. Instead, we offer portfolios with a broad and flexible range of risk profiles and investment styles, and a variety of management fees. In total we offer 24 portfolios providing a range of investment styles across differing risk profiles, which your financial adviser can use to help devise a suitable investment offering for you. Choosing a risk profile Your first step in finding the right Tatton portfolio is to discuss with your adviser the time horizon and investment risk you are able to commit to in order to achieve your return objective. We offer portfolios in six risk categories. In order of increasing ongoing variability of your invested capital (investment risk) they are: defensive, cautious, balanced, active, aggressive and global equity. Please note that we are neither offering ultra-low risk strategies (which have historically proven not to recover the average cost of advice and management charges), nor ultra-high risk strategies (which through lack of diversification have historically achieved both phenomenal returns, but also permanent losses). Active and tracker fund based investment portfolios explained In conjunction with your financial adviser, once you have agreed how much risk is right for you, you can choose from among Tatton s five investment styles (see the table, opposite). In the active styles, your money is invested by expert stock picking fund managers who select from a wide array of investments. If you want lower fees, our tracker portfolios could be a good choice. Instead of paying a manager to work out which particular investments could do well, the managed tracker portfolios invest in an array of index tracker funds. These indiscriminately hold every investment in their target universe so they reproduce the performance of an entire index such as the FTSE 100 index of leading UK companies. We don t force your investment into a limited selection of standard funds Alex Antonius, Chief Investment Consultant Tatton Investment Management 6

7 Tatton investment portfolios by risk and investment style Increasing risk Tatton Managed Tatton Core Blend Tatton Income Tatton Tracker Tatton Ethical Investment style active stock picking funds + active allocation management half active funds/half trackers + active allocation mgmt income distribution focused funds market tracker funds + active allocation management active picking of ethical stocks Tatton annual mgmt fee Underlying fund costs 0.15% % 0.15% % 0.15% % 0.15% % 0.15% % Defensive Cautious Balanced Active Aggressive Global equity Portfolio offered by Tatton Managing to control risk Primarily, we invest in a range of carefully selected regulated investment funds, rather than directly in stocks and shares. This enables us to achieve a wide diversification across asset classes worldwide. It also allows us to operate with a small, cost-effective team of experts who research and gain access to fund managers who are proven experts in their particular sectors and regions. Investment process Our management of your portfolio is focused on achieving the best returns available at any point in time without overstepping the risk mandate you have given us. To achieve this, we constantly monitor your portfolio to ensure that risks remain within the targeted relationship against return prospects. When things change for example, a fund loses a key manager or the sector it invests in becomes distinctly over-valued we can quickly move your money elsewhere, to another fund that we already know well. Our research Tatton has its own team of investment analysts but we also rely on established firms with a long track record of investment research to tailor the risk profiles of our portfolios and to help us choose the best possible investments. In particular we use data from Morningstar. The firm is a global leader in investment fund research that provides data on more than 540,000 investment offerings to individuals, financial advisers and institutions. Source: Morningstar Inc. Factsheet September 2016 Tatton Investment Management 7

8 Our management service Once you have considered your options with the help of your financial adviser and chosen Tatton, we manage your money through the Tatton Managed Portfolio Service, for an annual fee. We always work through financial advisers because they understand your needs Helen O Neill, Chief Operating Officer Our 24 portfolios invest in a wide range of fund based investments, also known as unit trusts or Open Ended Investment Companies (OEICs) and always regulated either by the UK s FCA or the European Union Undertakings for the Collective Investment in Transferable Securities (EU UCITS) set of common rules. The range of investments allows us to spread investment risk across many UK and overseas asset classes while keeping the overall cost of investment as low as possible. How we keep your investment on target Equity (stock market) exposure will follow the respective Morningstar/Ibbotson strategic asset allocation target, which is currently set to 26-98% depending on the specific risk profile. In the short term Tatton may deviate from this by a maximum of ±12.5% to adjust actual portfolios to prevailing market conditions. The ±12.5% provides us with enough allocation flexibility to adjust your portfolio to changing market environments in the short term, but provides vital discipline to your investment framework, so that your active portfolio s risk position does not stray beyond your agreed risk profile over the longer, investment term. Tatton Investment Management 8

9 The team behind Tatton Since we were founded in 2012, Tatton has grown fast. The team has grown as well, but our key members, who have worked hard to build our distinctive offering, have all remained in place. Our management team Lothar Mentel is Chief Executive Officer for Tatton Investment Management. Prior to setting up Tatton IM in 2012, Lothar spent four years as CIO for Octopus Investments, where he built a multi manager fund business that grew to 1.6 billion. Before that, he held senior positions with NM Rothschild, Threadneedle, Barclays Wealth and Commerzbank Asset Management. Lothar has over 20 years investment management experience. Jim Kean is Head of Investment at Tatton and brings over 25 years of industry experience to the team. He manages Tatton s investment department and is responsible for assessing global markets to determine future investment strategy. Prior to joining Tatton, Jim ran his own consultancy business. Before this he spent eight years as Head of Debt & Investment Research at Barclays Wealth, where he had responsibility for 7bn of assets. Alex Antonius is Tatton s Chief Investment Consultant. He takes the lead in forging links between Tatton Investment Management and the financial adviser community. Alex has been in the financial services industry since 1986 and has held senior positions at LloydsTSB, Friends Provident, Foreign & Colonial Asset Management, Octopus Investments and Nationwide Financial Services. Helen O Neill is Tatton s Chief Operating Officer. She is responsible for investment governance oversight, operational process oversight and product development. Helen has extensive experience of delivering high-quality platform investment products to retail and high net worth individuals. Most recently, Helen spent nearly five years at AXA Wealth where she helped develop investment strategy and onshore and offshore products. Tatton Investment Management 9

10 Choosing an investment platform Tatton always manages your money through an investment platform, which means that we come to you, rather than asking you to transfer your existing arrangement. We currently offer our portfolio management on nine UK investor platforms that provide services through UK regulated financial advisers. Using a platform is also beneficial for us: it means we can administer portfolios electronically, saving time, cutting costs and minimising potential for errors. The right platform for you If you are new to investment, your adviser will help you choose which of the platforms that we support will be best for your needs. Ready for your existing platform Since we work with a wide range of platforms, it s likely that if you already have an investment portfolio through your adviser you can leave your money where it is while we manage it. You will continue to receive the same valuation and ancillary activity statements from your platform as before. Additionally, we or your adviser can send you portfolio performance and market reports relating to our portfolio activities. You and your financial adviser can view your portfolio securely whenever you need through your chosen investment platform s website. Your financial adviser will remain your primary contact for anything relating to your Tatton investment portfolio(s), while they will have full access to the resources of the Tatton team for any specific queries. Please note that Tatton as a specialist investment firm can service private clients only through FCA authorised UK advisers. Platforms we work with Your Tatton Portfolio Service investment can be held within most major UK investment platforms including Nucleus, Amber, Transact, Standard Life, Aviva, Novia, Platform One, Alliance Trust and Aegon. Tatton Investment Management 10

11 Investing with Tatton If you decide to invest through the Tatton Managed Portfolio Service, your adviser will take you through the relevant application form(s). Once we and your platform have received your authorisation, we will send you a brief confirmation notification through regular post. Thereafter, we will always correspond with you, either through or together with your financial adviser, who will continue to accommodate directly any cash flow and investment change requirements you may have. If, in the future, you and your financial adviser decide that our services are no longer suitable to fulfil your objectives, then you can cancel this arrangement at any time, without having to leave your platform arrangements. For your notes Tatton Investment Management Limited is authorised and regulated by the Financial Conduct Authority. Firm Reference Number: Tatton Investment Management Limited is registered in England and Wales. No Registered Address: Paradigm House, Brooke Court, Wilmslow, Cheshire, SK9 3ND. Tatton invests for long-term returns Lothar Mentel, Chief Executive Officer Risk warning The information in this document does not constitute advice or a recommendation for any product and you should not make any investment decisions on the basis of it. Some portfolios may contain funds that are part of the Tatton Group of Companies. Please refer to the Investment Management Agreement for further details of any potential conflicts of interest. Please note that the value of your investment may go down as well as up and is not guaranteed which means that there is a possibility that you may get back less than you originally invested, particularly when you need to redeem before the recommended minimum investment term. Tatton Investment Management 11

12 Inside 2 Tatton makes discretionary portfolio management accessible 4 Your adviser knows you best 5 A prudent way to grow your money 6 Tatton offers a wide range of portfolios 8 Our management service 9 The team behind Tatton 10 Choosing a platform 11 Investing with Tatton web address 125 Old Broad St, London EC2N 1AR telephone All calls to and from our landlines and mobiles are recorded to meet regulatory requirements. Tatton Investment Management Limited 2018