W E A L T H M A N A G E M E N T

Transcription

1 WEALTH MANAGEMENT

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3 CONTENTS About Eos Wealth Management Limited 2 Background to Our Wealth Management Services 3 Our Wrap Platform 4 Our Investment Services 5 1. Our Managed Portfolio Service 5 2. The Eos Exclusive Service 8 The Process 10 Our Services and Charges 11 Disclaimers 13

4 ABOUT EOS WEALTH MANAGEMENT LIMITED Eos Wealth Management was borne out of the Directors combined 90 years of experience in the financial planning and wealth management industry. The business was formed in 2010, although its success and the founders dedication to their clients can be traced back to Eos Wealth Management has been awarded the Chartered Insurance Institute s (CII) prestigious Chartered Financial Planners title. Chartered status is an exclusive title only awarded to firms which meet rigorous criteria relating to professionalism and capability. As Chartered Financial Planners, Eos Wealth Management has a clearly defined Code of Ethics, reinforcing the highest standards of professional practice in our business dealings. We put our clients at the very heart of our business, ensuring that we clearly understand their personal, family and business goals. We tailor their financial plans and solutions to meet their objectives within the timeframes that work best for them. Our experience and unrivalled knowledge put us in the enviable position of understanding and delivering what is most important to our clients. This, together with our ability to empathise with our clients needs and circumstances, drives our thinking and propels us to the front of the queue when clients are looking for a trusted financial adviser. Our solutions seek to mitigate risk wherever possible and our regular reviews and 24-hour instant online access to portfolio valuations keep our clients informed of their ongoing progress towards their goals. the strategy aims to achieve year-on-year positive returns, without having to ride the wave of volatility normally associated with equity markets As Chartered Financial Planners, Eos Wealth Management has a clearly defined Code of Ethics 2

5 BACKGROUND TO OUR WEALTH MANAGEMENT SERVICES In recent times, it has become apparent that traditional investment models are not working to the benefit of investors. Returns are driven by the financial climate and expectations are set against market conditions. A fund manager is perceived to have performed well if they beat their benchmark, whether this is a gain or a loss. We recognise that there is no reason for investors to be content with an explanation for losing capital to be based on market returns. Our view is that clients should expect targeted returns and not market returns and our investment strategy is designed to provide this solution. This investment strategy and technique has not generally been available to individual clients until recently, having only been available to large institutional investors. It is a proven method of mitigating risk and introducing more certainty of returns. We would be delighted to offer you the opportunity to change the way you invest. This brochure will explain greater about what you can expect from our wealth management service and charges. We also set out the ancillary services we provide that complement and enhance the investment strategy. A personalised discretionary management service allows your investment strategy to be tailored towards meeting differing and changing objectives 3

6 OUR WRAP PLATFORM Access to our wealth management service is through our Wrap platform. A Wrap platform is an online account, allowing your assets to be managed from one place. Our Wrap platform provides: Simplified on-going administration; Online access to valuations; and Access to a wide range of funds. Simplified on-going administration A Wrap is a holistic wealth management product that allows you to consolidate all of your investments and to view your portfolio at any time. The Wrap account is also able to incorporate reporting of other investments that are not held within the individual wrappers so you can see both the snapshot of your investments and your overall picture. As well as this, our Wrap platform allows you to account for tax more easily and plan income distributions more efficiently, due to the facilities Wraps offer. Online access to valuations Our Wrap gives you a fast and accurate means of establishing your wealth position, whenever you need it. Your account is always available on the internet, giving you secure instant access to the information you need and enabling you to review the performance of your investments immediately 24 hours per day. Access to a wide range of funds Unlike many more traditional products, our Wrap platform gives you a wide range of investments and fund choices. The underlying individual tax wrappers are essentially empty boxes which can be filled with the investments that best suit your objectives and your investment strategy. Having access to a wide range of funds and other investments gives you the ability to change your portfolio, should you need to, without having to change providers. In most cases, as well as bringing you greater opportunity, the fund buying power of our Wrap provider will also enable you to access funds at a lower cost compared to using a more traditional provider. 4

7 OUR INVESTMENT SERVICES When we set out to select the people to entrust our clients money to, we had very clear criteria that they would have to meet, as well as the obvious ability to provide excellent service. We wanted a provider who had a long-standing history of successful investing and financial strength, but not only that, we wanted to make sure: that they would target positive growth, rather than tracking financial markets; that their strategies reduced volatility traditionally associated with investing; that they would be able to take advantage of any volatility that financial markets were creating; that they would rebalance portfolios so that clients investments were always aligned with their attitude to risk; and that they significantly diversify investments, so that the underlying assets would not all behave in the same way. Having identified our main requirements, we went through a rigorous process of interviews and analysis of investment managers and their propositions. Following this process, Eos Wealth Management has entered into an arrangement with Standard Life Wealth to provide discretionary managed investment solutions to our clients. Standard Life has been investing pension and life assurance policies for over 180 years. They are a house-hold name and have a proven track record in financial decision making and managing money. We believe they are well-placed to provide the type of investment strategy that is necessary, given current market conditions. We provide two main investment propositions as follows: 1. Our Managed Portfolio Service Depending upon your specific attitude to risk and/or objectives, we will select an appropriate strategy and you can invest most of your investment portfolio within it. This is designed to be a solution for investors who are keen to: reduce the volatility of their investment portfolio; maintain a diverse asset allocation; and ensure their investments continue to match their attitude to risk. The Managed Portfolio Service provides discretionary investment management expertise. Our clients have the opportunity to invest in up to five different managed portfolios, each supported by a unique investment strategy with a specific targeted return. We select the strategy, or strategies, that best meet your goals and attitude to risk. Each strategy is made up of a portfolio of funds selected from the very wide range available on our investment platform. The portfolios are actively managed by the investment team at Standard Life Wealth, who focus on ensuring that each strategy stays on target regardless of the prevailing economic conditions. 5

8 To help manage investment volatility, Standard Life Wealth has a unique capability called the Strategic Investment Allocation (SIA) fund. When used as part of a specifically designed diverse portfolio, this fund will mitigate some of the risks associated with financial investments. This helps Standard Life Wealth deliver a more consistent investment return, so increasing the likelihood of investors achieving their financial goals. Used as part of a diverse portfolio, the fund is designed to even out peaks and troughs in the market, providing a more reliable investment performance. The chart below shows how you could expect your funds to behave in comparison to a more traditional portfolio: Return Time Standard Life Wealth Portfolio Traditional Portfolio Client Goal The next chart demonstrates the many different sectors you can expect to find in one of the investment strategies. As the funds are actively managed, it is likely that the asset allocation will change over time. That said, the example does illustrate the depth and diversity of the investments within the strategy: Long equity variance Australian v Japanese medium-term duration Long USD v EUR US forward-start duration Long USD v JPY Japanese duration Financial sector v broad credit US equity large v small cap High yield credit HSCEI v FTSE Variance Russian Equity MARKET RETURNS OPPORTUNISTIC RELATIVE VALUE KOSPI v EUROstoxx Broad v financial sector equity Nikkei v S&P variance Australian short-term interest rates Global index-linked bonds Swedish short-term interest rates Long PLN v CZK Nikkei v FTSE Variance FX Hedging European swaption steepener FTSE dividends Cash Stock Selection UK equity EU corporate bonds US equity Global equity European equity UK corporate bonds 6

9 Targeted Returns The portfolios aim to outperform the 6-month London Interbank Offer Rate (LIBOR, which is the interest rate banks use as a reference when lending to each other and is another name for cash returns) by a fixed percentage. That targeted fixed percentage is dependent on the agreed risk level of the strategy and ranges from LIBOR plus 1% to LIBOR plus 5% net of all charges. The average anticipated returns are set for a rolling period of 3 years, in keeping with our aim that they are consistently delivered. The target is the minimum anticipated return which Standard Life Wealth look to achieve over the 3-year rolling period. Please note that because of its objectives and the way in which it seeks to dampen the volatility associated with equity returns, the strategy will not track the stock market both on the up-side and the down-side. Therefore, the returns from this type of investment will not climb the steep peaks or be at the mercy of the deep troughs generally associated with equity investment. Instead, the strategy aims to achieve year-on-year positive returns without having to ride the wave of volatility normally associated with equity markets. This type of approach is typically known as an absolute return strategy. However, positive investment returns are not guaranteed. Because the strategy reacts differently to the stock market, there may be times when the market rises and the portfolio doesn t capture the full upside or possibly falls in value. Correspondingly, when the market falls, the portfolio should not experience the full down-side and can, in some instances, increase in value. This type of approach to fund management is especially valuable when markets are volatile and essentially move sideways. The following graph illustrates the fact that, despite equities historically increasing in value over time, there can be long periods when markets do not offer any particular value over the medium term of, say, years. What this essentially demonstrates is that there can be fairly significant periods of time during which tracking the markets does not yield much value. 10,000,000 US equity market total returns, inflation adjusted Log scale, January 1871 to Nov 2011 Data source: Professor Robert Schiller, Yale University 1,000, ,000 10,000 1,

10 Clearly, time will tell and various industry experts and commentators will have different opinions. However, we do believe that Standard Life Wealth s approach to investment makes a compelling argument for reducing volatility associated with equity investment and achieving similar returns over comparable periods. On average, Standard Life Wealth s portfolios return the same performance as a traditional equity portfolio with a third less volatility. The concept of targeting absolute returns is known as liability driven investment (LDI). It is a path well-trodden by Standard Life who, when demutualising in 2006, had to provide assurances to shareholders that the deficit on their staff pension fund would not need to be bailed out from the profits and dividends due in future years to their investors. They implemented this investment strategy for their pension fund, looking at the liabilities the fund needed to meet and using the basis of Cash (LIBOR) plus targeted returns to meet the fund s short-term and long-term requirements. The pension scheme is now fully funded. This investment vehicle has been rolled out on an institutional level to other large international employers, including the Volkswagen Group. The origins of the approach also lie with the Standard Life Investments Global Absolute Return Strategies (GARS) fund, which has been selected by a number of Blue Chip companies as the investment strategy of choice for their pension funds, over 330 of them. These include Electrolux and Electo Components. In addition, UBS Private Bank have elected to invest 116 million of their UBS PACE Select Advisors Trust fund, which represents 25% of the assets under management. The GARS fund is an off the shelf solution, whereas the Managed Portfolio Service, whilst mirroring the strategy, provides a much more tailored solution. 2. The Eos Exclusive Service The Eos Exclusive Service is a full discretionary managed investment strategy. Your capital will be placed with an expert management team from Standard Life Wealth and an investment plan will be drawn up that matches your risk profile and is designed to achieve your specific objectives. Your portfolio will be adjusted on a regular basis and your objectives will be reviewed to ensure that the investment strategy is on track to meet them. You can invest through most product types, including tax wrappers such as a Pension, ISA or an Offshore Bond. The Eos Exclusive Service is designed to be a solution for investors who are keen to: reduce the volatility of their investment portfolio; maintain a diverse asset allocation; ensure their investments match their attitude to risk at all times; and benefit from a bespoke solution with their own dedicated account manager and exclusive investment plan. 8

11 One of the attractions of a discretionary mandate is that the Manager has the freedom to navigate their way through volatile markets and to mitigate some of the risks associated with financial investments. Furthermore, you may have investment goals that have different levels of importance or different timescales, for which you may be willing to accept differing levels of risk. A personalised discretionary management service allows your investment strategy to be tailored towards meeting differing and changing objectives over varying timescales throughout your lifetime. Your portfolio will be managed on two levels. On the first, your Manager considers the investment and risks associated with the overall investment market. On the second, they manage the investment and risks associated with specific stocks and/or funds in which they are investing. This dual approach is central to the investment strategy and provides the opportunity to generate greater returns whilst reducing the level of risk. The underlying performance and risks associated with investment markets will have a significant impact on the performance and risks of your portfolio. Standard Life Wealth s approach is to actively manage market volatility whilst trying to ensure that your portfolio benefits from the growth opportunities arising from the markets when those times prevail. Standard Life Wealth make sure your portfolio has the appropriate level of diversification for your level of risk. The aim of diversification is to ensure that any performance is not dependent on movements in just a small number of investment markets. When investing with Standard Life Wealth, your portfolio will include an allocation to the Strategic Investment Allocation (SIA) fund. This fund works in harmony with the rest of your investments within the portfolio and contains a number of advanced investment strategies. When put together with the other investments within a portfolio, these strategies help to minimise the impact of volatile market conditions. Our belief is that Standard Life Wealth provide reliable investment performance whilst reducing volatility and increasing the certainty of delivering your individual investment goals. We put our clients at the very heart of our business, ensuring that we clearly understand their personal, family and business goals before tailoring financial plans and solutions to meet those objectives within the specified timeframe. 9

12 THE PROCESS In order to establish whether our investment proposition is suitable for you, it is important that we carry out an information gathering exercise to establish your individual requirements. To do this, we will follow a simple process: We speak with you and establish your current circumstances and financial objectives; We ask you to complete a Risk Profiling Questionnaire to assist us in establishing your specific attitude towards investment risk; We ask you to complete a Goals Questionnaire (if appropriate) so that any specific investment requirements can be established; We prepare a detailed report confirming our understanding of your circumstances, objectives and provide our recommendations and guidance to help you achieve them; and We implement your plan. 10

13 OUR SERVICES AND CHARGES Clearly it is important that you know the details of our on-going service, our charges and any other costs you might incur. It is also very important for your investments to be reviewed at least annually, to ensure that the investments remain suitable for your circumstances and in line with your attitude to risk. Our charging structure is simple, depends on the type of advice you need and the level of on-going service you require. Any costs and services will be agreed individually with your Adviser, depending upon the level of service you require, but we have provided some details below of what you could expect: Initial Advice and Implementation Charge We will prepare a detailed report that includes an analysis of any existing investments and pensions and a detailed plan for achieving your objectives. Our standard fees for doing this are given below: Investment Amount Transferred Money New Money Up to 50,000 3% 2% From 50,001 to 300,000 2% 1.5% From 300,001 to 2,000,000 1% 0.5% Above 2,000, % 0.25% The services we provide for the initial fee include: Preparation of an initial valuation of your entire portfolio; Meetings and telephone conversations with your Adviser; Completion of fact-finding documents and attendance notes; Analysis and assessment of your risk profile; Analysis and commentary on any existing investments and pensions you hold; A full investment strategy and recommendation report; A personalised investment booklet (Exclusive service only); Implementation of your investment strategy; and Any other administrative requirements. It may be necessary to charge an additional fee if the work required is likely to be particularly technical, such as where we would need to analyse your pension benefits in detail. This will always be discussed and agreed with you before any work takes place. 11

14 Menu of Services and Annual Charges Our full annual advice and servicing fee is 1% p.a. of the funds on the service up to 2m and 0.5% p.a. thereafter. We will offer you the following services: Access to a dedicated Standard Life Wealth account manager (full discretionary service, only available for portfolio values greater than 400,000), if you would like to discuss their process in greater detail; Regular rebalancing of the investments to match your attitude to risk and objectives; Production of tax information such as income tax vouchers and Capital Gains Tax (CGT) statements; Detailed investment reports; Changes to investment plans on request; Annual portfolio analysis and performance review; Annual rebalancing in line with your risk profile and asset allocation (where assets are not invested with Standard Life Wealth); Portfolio commentary; Annual ISA recommendation if appropriate; Annual use of CGT allowance if appropriate; Annual advice regarding the structure of income withdrawals, where appropriate; Annual valuations (six-monthly where funds on the service are between 250,000 and 750,000. Above 750,000 quarterly valuations will be provided); Administration services for any paperwork that needs processing; and An annual meeting will be offered where your objectives will be reassessed in light of the performance of your investments. As an alternative, we offer a reduced service for a fee of 0.5% p.a. up to 2m (subject to a 600 p.a. minimum, we will automatically provide our enhanced service for funds of over 2m on the service). The service provided will be as follows: Annual valuations (six-monthly where funds on the service are between 250,000 and 750,000. Above 750,000 quarterly valuations will be provided); Administration services for any paperwork that needs processing; and An annual meeting will be offered where your objectives will be reassessed in light of the performance of your investments. Any work required to assess income needs, new advice, use of ISA allowances, use of CGT etc. will be charged for separately. 12

15 Fund and Fund Management Charges Standard Life Wealth levy a charge for managing your money and this will range from 0.9% p.a. to 1.33% p.a., dependent upon the investment strategy required. This annual charge includes all fees levied by the underlying fund managers they decide to invest with. In addition, Standard Life Wealth will charge 0.3% p.a. for their specialist management strategies i.e. the discretionary management of the portfolio. Discounts The fund and fund management charges can be reduced by discounts that are available on funds of 100,000 or over when you invest via our Wrap platform, as follows: Fund Size Rebate on SIPP Rebate on ISA and Offshore Bond and OEIC/UT Less than 100,000 Nil Nil Between 100,000 and 250,000 Nil 0.05% Between 250,000 and 500, % 0.10% Between 500,000 and 750, % 0.15% Between 750,000 and 1,000, % 0.20% Over 1,000, % 0.25% We will always include full details of any charges you can expect within our recommendation report. You will also benefit from discounts applied to all Eos investors within the service. This has been negotiated on your behalf by Eos and is set to benefit all investors as funds in our investment service increase. Transparency The advice we give you and our on-going service will have no additional hidden costs, charges or expenses other than the amounts we have quoted in our literature. DISCLAIMERS Eos Wealth Management Limited, registered in England no with its registered office at Acre House, William Road, London NW1 3ER, is authorised and regulated by the Financial Services Authority. Any services provided by Eos Wealth Management Limited are subject to Eos Wealth Management Limited s Client Agreement and Terms of Business, a copy of which can be provided upon request. This document is not intended to be an individual recommendation, it is for information purposes only. You will be provided with a full recommendation report after consideration of your circumstances and objectives. Errors and omissions excepted. You should remember that the capital value and income from investments can go down as well as up and returns are not guaranteed. Past performance is not a guarantee of future returns; it is merely a guide to the investment strategy of the underlying fund It is important to periodically review your investment to ensure that it continues to meet your objectives. There may be encashment penalties if investments are not held for their full term. 13

16 Eos Wealth Management Ltd 30 City Road, London EC1Y 2AB Tel: Fax: Acre House 11/15 William Road, London NW1 3ER Tel: Fax: designed by sears davies