Investment Philosophy

Independence

Putting our clients’ needs first is our primary imperative and this means we must have no affiliation with any companies nor receive any incentives, of any kind, from any third party.

Independence is rare in France, since non-independent advisers may still collect commissions from third parties, thus many, formerly independent advisers, switched to tying themselves to specific providers, to continue receiving commission, arguably privileging what is best for them and not their clients.

We are only paid by our clients, which means our priorities are exactly where they should be, privileging only what is best for them.

Be Transparent and Low Cost

How we charge and operate is completely transparent. Who gets paid what, how and when is always detailed, with a total summary, so all is absolutely clear, making all charges easy to understand.

With the majority of advisers taking commissions, they will often suggest investment funds which pay them the most.

It is important to be aware that managed funds may contain annual fund management fees and charges (known as the Ongoing Charge Figure or OCF) as high as 3%. Worryingly, these charges are often ‘hidden’ in the small-print, within abundant printed data and thus not immediately obvious. Much of this is used to pay commissions to the advising individual or company.

Since we receive no such commissions, fund costs tend to be exponentially lower than those offered by other advisers.

For further details on this subject, we suggest you follow this link, to read an article originally published in the Connexion newspaper in October 2021.

Do No Harm

Our investment recommendations revolve around ESG, or Environmental, Social and Governance. We focus, not only on doing no harm, but doing good with the funds that we manage. Far from believing that this means accepting inferior returns, we believe that well managed, open and honest companies will always perform better in the long run, so such filters remove the dead wood of court cases and scandals waiting to happen.

Beware of Bespoke

The moment a money manager offers you, what they want you to believe is the best and bespoke portfolio, how do they then offer the same to someone else and call it bespoke? Surely now it is just an exact copy, a duplicate … ‘off the peg!’ They either need to change it so it is not quite as good, or break the promise to you, the client, that what they are offering you is somehow unique.

When it comes to investing, it is an accepted fact that risk and reward are interconnected. This means that money managers can serve everyone by having several profiles matching the desired different levels of risk and reward. This, in reality, is what financial institutions do; they have several managed portfolios, designed to fit every risk / reward profile, after which, they ask you questions to understand the portfolio best suited to your position and objectives. This enables them to make the recommendation, which many then offer as “bespoke”.

It sounds like we are being critical of this strategy, however, this is very far from the truth. Using a range of portfolios makes a huge deal of sense, for both the advising institution and the investor as it “should” keep costs to an absolute minimum, match exactly the investors risk / reward profile, whilst ensuring the very best in quality management possible. (Significant investment is made by managers to ensure the quality of these, often very sizable, portfolios).

What we do not support is to promote it as in any way as “bespoke”, which would be ‘materially’ incorrect! Calling it bespoke, however, allows financial institutions to keep their costs low and input to a minimum, whilst charging the investor as much as possible, maximising profits for themselves. Whereas this approach “should” mean low costs and maximised returns for the investor.

Diversification

Many advisers give you the promise that they can see around corners, or have found the secret mystical recipe of investing, or will merely point to past performance of a fund, which may only have done well for a few years. We believe that no one can see what is coming next, as is proven by the fact that very few actively managed funds even match the markets, let alone beat them.

Indeed, according to Standard & Poors over the 10 years ending December 31, 2019, 89% of domestic equity funds and 65% of institutional separate accounts underperformed their benchmarks, net-of-fees. Likewise, a report by the consultancy firm Hewitt EnnisKnupp, which is in the business of finding and recommending investment managers, found that less than 2% of managers generate out-performance beyond their fees while 16% provided performance equal to their fees.

Diversification is key in avoiding permanent loss of capital, which is a reality of narrowly invested portfolios.   For many people, when they think of investing in the markets, they might also think of a roulette wheel and anxious, perspiring people standing around it, with their white knuckled fingers crossed for their choice of either black or red. For many investors, this is exactly what it is like, looking for the next Apple or Amazon and putting all their money in one or two companies, sectors, or countries, which is hardly sensible financial planning.

All it needs is for these not to work out and loss of capital is likely, if not certain. Of course, the payoff can be big too if it succeeds. That sounds like gambling to us! The point is that most of the people whom we talk to are not looking for a killing, just wishing for sensible, reasonable returns, without the white knuckles.