Skydiver Graham Wingar prefers to keep his feet on the ground when it comes to investment. While he is focused on financial planning investment decisions are outsourced, but through a variety of means.
His firm, Bridgend-based Future Asset Management, furnishes clients with recommendations for a range of funds-of-funds, multi-asset and model portfolio services, alongside discretionary fund manager (DFM) Margetts. Future likes active managers that demonstrate extensive research and diligence.
‘Our active approach isn’t a slight against passive investments,’ said last week’s cover star. But he struggles with the notion of considering only passives, since he believes they are an asset class, rather than a complete investment solution.
‘We wouldn’t mind having a manager who suddenly decides he needs to hold all passives, but we want them to consider the feasibility of both,’ he said. ‘We look to find a really open investment proposition that’s right for the clients and can be flexible. And we want it at a reasonable cost.’
Wingar says Future, which does not segment its proposition according to the size of client investments, has no typical client.
When it comes to choosing DFMs, Wingar believes the cheapest are not the best. ‘You should be concerned with providers who don’t charge enough to keep good staff and provide a high level of investment research and service,’ he said. ‘Clients only see real net returns.’
For instance, Margetts charges 0.7%. Wingar said the in-depth research it uses for fund selection is beyond what a firm of Future’s size could do in-house.
‘If we were a bigger firm doing our own investment, we’d charge separately for it,’ he said. ‘You can’t do all of the investment research and financial planning properly for one fee. The total cost would be about the same, whether we do it or someone else does it.’
Wingar says using only one DFM means Future has built a strong relationship with its administrative team, the investment manager and the research team. So it can ensure its bespoke DFM portfolios are a perfect fit for clients.
Future looks for a DFM team that can fit into its advice and investment structure. ‘It must have a long-standing, consistent track record,’ said Wingar. ‘We like a DFM where the key parties are an integral part of the company. This minimises the chances of disruption to clients’ investments.’
In addition, Future caters largely for ethical investors through Margetts. Wingar says that many ‘off-the-shelf’ ethical portfolios are a poor match for clients with such concerns. ‘A client might just want to avoid a couple of industries,’ he said. ‘But most off-the-shelf products are far more restrictive than this.’
Aside from its bespoke DFM portfolios, Future uses providers with varying styles and approaches, so as to accommodate as many client preferences as possible. The Premier Balanced Portfolio is most representative of the type of portfolio Future recommends to clients. This is part of the Premier Portfolio Management Service, which offers a range of actively managed portfolios for clients with varying risk appetites.
It ranks 89 out of 281 comparable funds in the past five years, returning 34.6%. This is below the LCI Mixed Asset GBP Bal Global benchmark, at 41.2%.
‘We have no concerns with any of our providers,’ said Wingar. ‘All are performing well on a risk-adjusted basis. We measure risk by volatility, liquidity, historic maximum drawdowns and value at risk.’