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Background
UK family spanning three generations. There was a sale of a significant business asset ten years ago. At point of sale three managers were appointed alongside an existing relationship with a private bank to manage a Family OEIC, Family Trust, Charitable Trust and personal accounts.
We were asked to provide a one-off review for the family by a partner of a leading law firm as a comprehensive review had not been carried out in seven years.
The mandate was to assess each manager’s performance against internal and peer benchmarks and highlight any inconsistencies against investment policy statements.
Our Process
Stage One
Our findings along with a set of recommendations were made to the client and Trustees, through a written report and a follow up call. Key concerns were;
• Incorrect or misinterpreted risk levels by two managers
• One manager changed benchmark mid drawdown while another’s was inappropriate
• There were cost concerns relating to one of the managers and changes and potential action points around underperformance, particularly where risk adjusted outcomes were disappointing
• Reporting for two managers was difficult to understand, particularly performance
• One manager had dramatically underperformed its benchmark and a second was underperforming it’s internal and peer benchmark
At this point we were asked by the client to provide ongoing consultancy services to the family and trustees to help with analysis and risk profiling, manager selection and ongoing performance monitoring.
Stage Two
Our first points of action were to address the concerns raised in our initial report, working in conjunction with the family and their lawyer/trusted adviser;
• New investment policy statements were drawn up
• Two beauty parades involving family members and Trustees were held resulting in two new managers being appointed
• Costs were reduced in both cases providing better value
• Relevant benchmarks were applied for the other managers and risk concerns were addressed
• In one case a manager was put under close review
Outcome
The family now have single point of contact along with simplified reporting for each element of their complex estate. In addition the associated Trustees are comfortable competent oversight is in place, supporting their fiduciary responsibilities.
