Investment Management Service Provided by for
About Bestinvest Since 1986, our commitment to helping our clients reach their financial goals has made us one of the most successful independent financial services companies in the UK. Our aim is to offer the highest levels of professionalism and expertise with transparent, competitive pricing. Over the past 25 years we have grown to become a business which now manages or advises on over 4 billion of assets. We are pleased that the greatest source of new business for us is recommendations from existing clients. We pride ourselves on being a personal and specialised organisation where we can customise our services to your individual needs. Our accumulating and sizeable asset base enables us to drive down costs and deliver what we believe to be one of the best value discretionary investment management services in the market. We are wholly owned by our staff and 3i an international investor, who has been listed on the London Stock Exchange since 1994. 3i s backing allows us to invest in the business, retain and recruit the best people and remain focused on the needs of clients, rather than the short-term demands of external shareholders. Please remember past performance is not a reliable indicator of future returns. Contents page Welcome 1 Our investment philosophy 2 Constructing your portfolio 4 Our investment universe 6 Expertise you can rely on 7 The Investment Management Team 8
Welcome Whatever the future brings you need to be confident your assets are being managed efficiently and effectively. We select market-leading investments, many of which have traditionally been available only to institutional investors. We then construct a bespoke portfolio that meets your individual needs now and long into the future. Why choose Bestinvest? Our investment management team are highly experienced and talented professionals, who have been managing investment portfolios for many years. We aim to build strong and lasting relationships with our clients, so we will always put your needs first and, through our charging structure, align our interests with yours. You will always get unbiased and independent advice. Our investment management service uses institutional investment techniques which have delivered strong performance at a very competitive cost. We are very proud to have been named UK Wealth Manager of the year 2011 and Best Wealth Manager for Investments 2011 by the Investors Chronicle and Financial Times as well as Best Discretionary Manager 2011 by MoneyMarketing and Citywire Wealth Manager Investment Performance Award 2011 Cautious Portfolio. If you decide to become our client, I promise that we will always strive to provide you with the highest level of personal service, backed by the technical expertise of some of the UK s most knowledgeable investment professionals. Thank you for taking an interest in Bestinvest. We look forward to hearing from you. Peter Hall Chief Executive 1
Our investment philosophy Four beliefs are central to the way we invest our clients money. RISK monitoring is crucial when managing a portfolio of investments. We ensure the level of risk taken is appropriate and remains consistent, however volatile markets may become. Over many years, we have developed our own proprietary systems to assess volatility and monitor the risk we are taking when managing your portfolio. RESEARCH is fundamental to everything we do. We believe better information leads to better decisions, from understanding our clients needs to analysing funds. We conduct over 400 interviews with fund managers each year and pay particular attention to whether managers have consistently added value or just had the good fortune to be in the right stocks at the right time. Our unique MRI (Manager Record Index) tracks a fund manager s performance over their entire career, determining if their track record has been skill-based or luck. We are wholly independent and not tied to any one provider. This allows us to pick the best investments for you without fear or favour. ACTIVE ASSET ALLOCATION is one of the key drivers of risk-adjusted returns. Getting the right balance between the different asset classes is fundamental to the overall success of your portfolio, resulting in a broader set of investment opportunities and helping to control risk. Constructing portfolios in this way should assist in protecting your investments in periods of high volatility. A typical portfolio is constructed using equities, quality bonds, high yield bonds, property, commodities and hedge funds. We believe this multi-asset approach to investing should lead to a smoother return profile. Asset Allocation seeking risk adjusted terms Return % Equities Multi Asset Smoother Path Time Theoretical data. For illustrative purposes only. 2
COLLECTIVE INVESTMENTS It is our belief that the best stock pickers manage funds rather than client portfolios. Our research evidences that the majority of fund managers fail to outperform their benchmark over time. It is therefore vital to select those fund managers that consistently outperform. The benefits of diversification No-one can predict which asset class is likely to be the best performer from one year to the next so it is important to spread your portfolio across a range of assets in order to increase exposure to opportunities, while also reducing risk. 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Higher Returns Lower Returns Corporate Bonds Government Bonds Cash Emerging Markets Developed Markets Hedge Funds Property Source: Bestinvest The value of your investment can go down as well as up and you can get back less than you originally invested. 3
Constructing your portfolio At Bestinvest, we use our in-depth knowledge of investments to create a portfolio that is completely individual to you. Understanding your needs and analysing available investment options We work with you to identify your goals and priorities and assess your attitude to risk. We also discuss whether you want your portfolio to produce a required level of income. If we cannot meet your objectives within your risk tolerance, we will re-assess together the options open to you. Once we have established your investment goals we then structure your portfolio to ensure optimum tax efficiency. Building your portfolio and implementing the recommended solution We use strategic asset allocation models, designed by our research department, as a framework for constructing your portfolio. These models are set by our Asset Allocation Committee, a senior team of investment professionals who regularly review the outlook for world markets and decide on the weightings in the asset classes for each model. Portfolios can then be further adjusted in line with your individual requirements. We have always believed that managing portfolio risk is best achieved through active asset allocation across equities, bonds and other asset classes. This top-down strategic overview is complemented by shorter-term tactical asset allocation overlays to exploit specific opportunities and guard against risk. By combining strategic views with tactical tilts, we can ensure you benefit from our core investment themes and best ideas. Example portfolio* Asset allocation Geographical equity split Capitalisation equity split Equities 42% High Yield Bonds 4% Quality Bonds 28% Other Assets** 21.5% Cash 4.5% UK 7% Europe 11% North America 26% Japan 7% Asia Pacific 35% 14% Large Cap 67.5% Mid Cap 20% Small Cap 12.5% *For illustrative purposes only. **Comprised of hedge funds, commodities and property. 4
Monitoring performance and changing needs Your investment manager will adjust your portfolio as appropriate in line with our strategic and tactical asset allocation and fund manager selection decisions. This will enable us to respond proactively to changes in market valuations. On a regular basis, we will review progress with you, ensuring that your portfolio continues to meet your needs given your circumstances. You will receive six-monthly valuation statements, and you can also check your portfolio at any time through our secure online account. 1 UNDERSTAND your needs What do you want to achieve? 5 MONITOR performance and changing needs Have your objectives changed? RESEARCH 2 ANALYSE available investment options What is your personal tolerance for risk and volatility? Are your objectives achievable within those tolerances? 4 IMPLEMENT recommended solution We make ongoing asset allocation changes in response to market conditions. 3 BUILD your portfolio We create the most efficient solution for you at the optimal level of risk necessary to meet your goals. 5
Our investment universe Having agreed the most appropriate asset allocation, we aim to use the highest calibre managers in each asset class and geographical locations. There is no single house that has expertise in all areas so we use a best of breed approach. We use collective investment funds such as unit trusts, open-ended investment companies ( OEICs ), investment trusts, zero dividend preference shares, exchange-traded funds ( ETFs ) and structured products to construct a portfolio. Funds make it easier to achieve international diversification crucial in a global economy. We believe our clients should have their money looked after by market-leading fund managers. Our view is that the very best active managers should consistently outperform their benchmarks by generating superior risk-adjusted returns. Funds the key advantages Funds offer diversification which reduces stock-specific risk. 2. Easy access. Funds allow you to access investment strategies and asset classes that are not always available to private investors, such as hedge funds and emerging markets debt. 3. Access the best managers. Due to our overall assets under management, we have access to the world s best managers, whether that be from a boutique house or a larger asset manager. 4. Value for money. We have discounted front-end fund charges, typically around 5%, down to nil for our rated funds and we negotiate the best commissions from managers which we will then rebate to you each year. 5. Tax-effective. Funds offer significant tax benefits. Unlike a private investor, fund managers can buy and sell shares without incurring Capital Gains Tax, so they can take profits and reinvest without having to worry about the tax implications. Alternative investments As well as the traditional asset classes such as equities and bonds, we will also consider hedge funds, structured products, ETFs, commercial property, commodity funds and zero dividend preference shares. Alternative investments provide access to sophisticated investment strategies typically designed for institutional investors. These investments are often less restricted and offer greater freedom for experienced fund managers to capitalise on opportunities. Alternative investments also tend to have a lower correlation with the equity and bond markets, offering increased diversification. Passive investments Where we cannot identify active managers who consistently outperform their sector, we use investments which track the performance of the sector at lower cost, including index funds, low cost active funds and ETFs. Please remember, the value of an investment and any income derived from it can go down as well as up and you can get back less than you originally invested. 6
Expertise you can rely on At Bestinvest, we offer advice you can trust from professionally qualified experts. Our Investment Managers have an average of over 15 years industry experience, so you can be sure the advice you receive is based on a deep understanding of investment issues and best practice solutions. But it s not just about time in the job our team have a commitment to broaden their skills and learn new ways to add even more value for our clients. Bestinvest is fully authorised and regulated by the Financial Services Authority. Our Investment professionals are all Members or Fellows of the Chartered Institute for Securities and Investment. Many of our investment professionals have undergone additional training in specialist areas of finance to ensure our clients benefit from the best possible advice.
The Investment Management Team We have a well resourced team of investment professionals to manage your assets. Portfolio managers are organised to ensure that your portfolio is always being supervised even when an individual manager is on holiday. Gareth Lewis Head of Investment Management In September 2011 Gareth joined Bestinvest as Head of Investment Management. He previously worked at UBS, where he was deputy head of Investment Management for UBS in the UK having previously headed up their Central Investment Team and been Chief Investment Officer for UBS (UK). Mike Neumann Director of Investment Management, FCSI Mike joined Bestinvest in 1996 and was at the Company for over 10 years before taking a career break in 2007. Mike rejoined as Director of Investment Management in 2008. Prior to Bestinvest, Mike was a Vice President at US brokers Smith Barney. Mike has a BSc and a MBA from Cranfield. Matthew Chambers Investment Director, MCSI Matthew joined Bestinvest in 2006 and is one of our most senior Investment Managers. Prior to Bestinvest he spent 9 years as a stockbroker with Cheviot. Richard Hunter-Gordon Investment Director, MCSI Richard joined Bestinvest in 2004 having previously worked at Saunderson House as an Investment Manager. Earlier in his career Richard also spent time working in Hong Kong and Singapore. Richard studied Philosophy and Economics at the University of Reading and is also a Chartered Accountant. Julian Hall Investment Director, FCSI Julian joined Bestinvest in January 2009 having spent 22 years at Newton Investment Management where he was an Associate Director Private Client Investment Manager. Richard Francis Investment Director, Chartered MCSI Richard joined Bestinvest in July 2007. He joined from Dominion Fiduciary where he was an Investment Manager. Previously he worked in Equity Research with Merrill Lynch and then moved to the investment team at Saunderson House. Richard has a MA (Hons) in Economics from the University of Edinburgh. William Scott Investment Manager William joined Bestinvest in 2006 having previously worked for an accountancy practice. William has a BA in Economics from Newcastle University. 8
Lewis Cohen Investment Director, FCSI Lewis is a personally Chartered Fellow of the Chartered Institute for Securities & Investment and joined Bestinvest from Charles Stanley, where he was an Investment Manager. Prior to this he worked at Barclays Wealth and has over 10 years industry experience. Holly Merriman Investment Manager Holly joined Bestinvest in 2010 having previously worked at HSBC Private Bank and Brown Shipley. She graduated in 2001 from Newcastle University. Caroline Gibson Investment Manager Caroline joined Bestinvest in 2005 and trained as an Investment Adviser prior to joining the Investment Management team in 2007. Caroline has a BSc in Mathematics with Economics from the University of Leeds and is currently studying for the CFA. Stephen Thomas Investment Manager Stephen joined Bestinvest in February 2011 having spent over four years at Barclays Wealth. He was previously an Investment Manager at Brown Shipley and began his Financial career in May 2000. Stephen has a BSc Business degree from Cardiff University. Andrew Rees Assistant Investment Manager Andrew joined Bestinvest in 2011 with seven years of business development and client management experience. Andrew has a MSc in Finance from BPP Business School and a BA in Political Science from McGill University in Canada. Andrew is currently studying for the CFA. Ann Clarke Investment Management Administrator Ann joined Bestinvest in 2008 to provide a mortgage service to Bestinvest clients. Following the transfer of the mortgage service to Haines Watts she took on a new role as an Administrator within the Investment Management team in July 2010. She has worked in various roles within the Banking and Finance sector for twenty years. Marcel Porcheron Assistant Investment Manager Marcel has eight years industry experience and previously worked as an analyst on Bestinvest s Research, the team managing the MAP funds. Marcel joined the Investment Management Team in 2011 following two years in France. He has a BA (Hons) in History of Art and a MBA from HEC in Paris. Tom Delahunt Investment Management Administrator Tom joined Bestinvest in 2005, having previously worked for Pershing Securities Limited, the custodian company for our investment management clients. Tom has completed the Investment Administration Qualification. Daniel Bland Assistant Investment Manager, MCSI Daniel joined Bestinvest as a graduate in 2008, training as an Investment Adviser before moving to the Investment Management team. Daniel has completed the CISI Masters in Wealth Management and read Politics at the University of Nottingham.
Important information The value of your investment can go down as well as up and you can get back less than you originally invested. Funds which invest in specific sectors may carry more risk than those spread across a number of different sectors. Some investments denominated in foreign currency may be subject to exchange rate fluctuations. Prevailing tax rates and reliefs are dependent on your individual circumstances and are subject to change. This document does not constitute personal advice. If you are in any doubt as to the suitability of an investment, please contact one of our advisers. Bestinvest (Brokers) Limited, Reg. No. 2830297 and Bestinvest (Consultants) Limited, Reg. No. 1550116 are both registered in England. Registered address: 6 Chesterfield Gardens, Mayfair, London, W1J 5BQ. An independent adviser authorised and regulated by the Financial Services Authority. 030512-2048