Two heavyweights of wealth management have teamed up to form a boutique they believe can ‘disrupt’ the industry.
Paul Marson, who has served as chief investment officer at Goldman Sachs Wealth, Morgan Stanley Wealth and Lombard Odier, has joined forces with his former Goldmans colleague Milena Ivanova (pictured) to set up London-based Monogram.
Marson will be responsible for the investment management at Monogram and Ivanova, who has also had spells as a partner for Vestra and managing director at Signia Wealth, will take a lead on the business direction.
Keeping costs as low as possible is a key feature of the boutique. Ivanova told Wealth Manager the annual fee will stand at 1%, while the total expense ratio will be minimised through negotiations with 20 custodians to force fees down.
Ivanova said third party costs for custody, execution and products (eg ETFs fees) are expected to be around the 50 basis point region versus the industry average of around 150 basis points.
To also ensure costs remain on a tight leash Monogram will keep turnover low and use exchange traded funds.
‘Costs and fees eat away returns and destroy the client experience,’ said Ivanova, who along with Marson will be investing a ‘significant’ portion of their wealth with the firm.
‘We want to do the right thing by the client. Monogram is committed to integrity, transparency and an alignment of its interest with those of their clients.’
Monogram also sees wealth management as failing on performance and believes its investment process will shake things up.
The process is rooted on the belief drawdown is the only relevant measure of risk, with its avoidance at the heart of the philosophy.
Ultimately Monogram reckons market pricing and behaviour of most investors is generally inefficient. To exploit these inefficiencies the firm has developed processes for equity, commodity and bond markets, which combine value, momentum, risk and economic stress factors.
The philosophy has been packaged in the Luxembourg-domiciled Monogram fund, which will be run by Marson.
The fund starts with default allocation of 100% cash and will employ a disciplined drawdown control. It will only allocate towards equities, bonds, commodities and cash if prevailing conditions – based on secular, cyclical and valuation criteria – are favourable.
‘Using a unique investment philosophy based on observation, we can identify and avoid big market falls and provide sustained superior returns for our clients,’ Marson said. ‘This is a low turnover; tax efficient approach to investing that is rooted in empirical evidence and rigourous testing.’
Ivanova added: ‘Monogram believes that conventional fund management isn’t delivering. Our innovative approach seeks to preserve and grow wealth in all market environments, rather than just beating the benchmark.’
Monogram is targeting clients ranging from high net worth families, endowments and foundations across the globe.
The firm also offers segregated managed accounts for clients investing more than £5 million.