Adviser workshop: Taking the passive investment approach

Jeremy Davis of 35 Finance explains why he likes passive investments, especially ETFs. Two of his peers share his enthusiasm.

The issue

Years spent advising on agriculture projects in the developing world may explain why Jeremy Davis of 35 Finance is so fond of passive investments; sit back and watch them grow.

Davis has a foot in both the active and passive camp with 30%-50% of his firm’s £55 million of assets under management in exchange traded funds (ETFs) and various other tracking investments.

Open door

Adopting the Standard Life Wrap has thrown open the door to new passive investment opportunities for Davis, who is debating going further down this route.

He says he already has clients 100% in passives where this was specially requested.

‘The Standard Life wrap is an excellent way to access them [passives]. That ability is not there through Cofunds or Fidelity FundsNetwork,’ he says.

What to do with existing clients on his old platforms, Cofunds and FundsNetwork, which do not offer ETFs is a puzzle for Davis.

He also has a number of clients with discretionary managers Deutsche Bank Tilney.

Philiosophy is not an issue

Pragmatism defines his investment strategy: ‘I’m totally pragmatic – I don’t have a philosophical axe to grind.’

Passives, particularly ETFs, which are low cost and have a wide range of underlying investments, have earned Davis favour. He remains sceptical of some advisers’ ‘religion-like’ view of Dimensional Funds. ‘I don’t like the intensive philosophical side of Dimensional,’ he says.