Why Charities Should Consider a Modern Wealth Manager

As the investment landscape evolves, charities are adapting. This is often a proactive choice by trustees, or sometimes circumstances may compel them to review who manages their funds.

As ever, trustees must rigorously manage risks and ensure appropriate due diligence is carried out. This also entails exploring the full mix of styles for managing money to ensure charities are not missing out – so they can take advantage of greater efficiencies and control for the benefit of their charitable causes.

Let’s examine why charities should consider the benefits of a modern wealth manager.

Better transparency aids due diligence

Trustees must establish if they are choosing a wealth manager who meets their due diligence demands.

Some modern wealth managers make this easier than most. By having transparency embedded as one of our founding principles, a charity can confidently find out what they need to know from the start – while a culture of transparency and user-friendly technology also makes this oversight simpler on a daily basis.

An approach well equipped to managing risks

One of a trustee’s prime objectives is to ensure unwarranted risks are minimised. As persistent economic (e.g. trade wars, Brexit) and investment challenges (e.g. the Woodford saga) show, there will always be hurdles to overcome. Yet these negative impacts can be mitigated somewhat with a seasoned management team backed up by powerful investment tools.

Our investment approach removes stock and fund manager selection risk, and reduces liquidity risk. We invest predominantly through passive funds and ETFs to ensure high levels of diversification and to help keep costs low as we target returns in excess of inflation over the medium to long term.

This approach also means we can counter some of the downsides of active money management, which has been shown to underperform passive investing over the long term – even in a downturn.

To help trustees find an investment solution that suits their particular needs, for a given timeframe, we offer a choice of seven portfolios with a broad range of risk options.

More control – for better decisions

In the digital age, consumers demand swift and easy access to information and communications. Investors, too, increasingly choose more agile services to help them stay in control of their assets.

Our helpful planning tools create an almost unprecedented level of control for charities. Trustees can model for different outcomes, and effectively plan for their charity’s objectives – while effortlessly being able to view their accounts and create bespoke cashflow models if they wish.

Value for money

Another benefit of passive investing is the ability to rein in costs. Our modern infrastructure and lower operational costs also help us to offer lower annual management fees than traditional discretionary fund managers – who may charge more than is necessary for managing money, and who may even link their fees to previous performance.

Our charging structure is uncomplicated and clear, and because we invest mainly in passive funds and ETFs, the considerable impact of lower fees can make a charity much better off and free up valuable additional funds.

Actively managing biases

By sticking to sensible, calculated combinations of diversified, liquid assets, our highly experienced investment team aims to protect our investors from many of the behavioural pitfalls that can impact long-term investment performance.

The benefits of this strategy have been reflected in our three-year performance and recent industry awards. Yet we are never complacent.

Investing is not static. Like many charities, we also often review the evolving best practices and tools in the industry – so we are better positioned to meaningfully assist clients if they need guidance, and to consistently help them to achieve their investment goals.

Please remember that when investing your capital is at risk.