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BUSINESSLIFE.CO PROMOTION A new investment philosophy


Lord North Street believes in an independent investment approach for high-net-worth individuals. But what does this mean in real terms, and what should you be asking your wealth manager?


S


OME COMMENTATORS suggest that the global financial crisis has successfully been contained and that we are entering another period of growth. It may be closer to the truth to suggest that the economic world is divided between the walking wounded and those enjoying stronger growth. There is no question, however, that the world has changed for good. Much of the ultra-high-net-worth community in Europe saw its wealth severely depleted during the crisis and, despite better years in 2009 and 2010, many are struggling to decide what to do now. Indeed wealth managers themselves are facing an unprecedented combination of challenges.


Private bankers and investment managers across Europe are having to rethink their business models, and ask themselves what existing and potential wealth management clients are looking for when assessing the financial advisers responsible for the care and wellbeing of their fortunes. Providing a quality service and advice that is best for their clients will determine whether they win or lose in their bid to retain client loyalty. At Lord North Street, we believe independence is key, where the impartiality of truly unbiased investment management is the only option. We call this model a ‘Private Investment Office’ and it’s inspired by what our clients have told us they really want and the questions they have asked us.


But if you are a very high-net-worth investor, what exactly should you be looking for from your adviser?


A RIGHT TO KNOW


Here are a number of questions you should ask any potential wealth manager or advisor:


How are the individuals looking after me remunerated? If remuneration is driven by commission or the pressure to sell an in-house product, then you’re talking to the wrong organisation.


Has my adviser taken the necessary time and effort to understand my needs and the needs of my family, or am I being pigeonholed into a predetermined solution? For each family and client, the solutions should be bespoke and not based on preconceived portfolios.


Do my advisers have the required expertise in each asset class, or are they biased towards one? Do they earn more from one asset class than another? There are many specialist and able firms in different asset classes, but none are the best managers in all classes. Are they able to provide or source the expertise required across asset classes?


How much am I really paying for advice? Demand a breakdown of all costs showing exactly who is getting paid what. We believe that, to ensure the client’s interests are put first, there should be one transparent fee made by the wealth manager, which is the only source of revenue they get. All other transaction costs and external management and custodian fees should be


brought down to the lowest possible level. Moreover, all return commissions should be credited to the clients’ accounts.


Other key questions include: Am I being sold the right products? Have they framed their offering within an overall investment logic and strategy? Have they defined all the risks? Only when your adviser has answered all this to your satisfaction and you are confident they understand your needs should you progress. At Lord North Street, this is exactly what we do. We look at the whole picture of your needs, and design portfolios that deliver superior wealth protection and investment performance. n


For more information, call William Drake or Adam Wethered on +44 (0) 20 7647 2450 or visit www.lordnorthstreet.com


December 2010/January 2011 businesslife.co 25


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