David Howell – International Adviser Profile
David Howell is confident that Guardian Wealth Management will succeed in the challenge of rolling out its UK lifestyle financial planning model across its international business.
In a featured article in this months New Model Adviser David goes on to explain the challenges that face both the domestic and overseas market and why IFA’s do and need to change. Here are a just a few snippets from this featured article.
Guardian has not had to go through any major transformation as a result of the retail distribution review (RDR) because it has always been run as a financial planning business and has not accumulated many purely transactional clients.
David goes on to explain in the article that ‘Clients want a deep and meaningful relationship, not to be sold a product or service’ he says. ‘They want us to find out where they are and help them get where they want to be, and use the tools to do that: understanding tolerance to risk, using a cashflow model to create a lifestyle financial plan that means something.
‘Advisers used to have a relationship with the money not the client. I think there is a new breed and a new model.’
Guardian plans to use the UK to feed the other offices with trained planners through the certified financial planner (CFP) qualification, which is recognised internationally.
David goes on to clarify that ‘If our planners are CFP in Hong Kong, they will be CFP in other parts of the world. If you look at where the CFP trademark is recognised then that’s where we will expand,’ he says. ‘Our aim is to create an international financial planning practice. It would be cross-border, dealing with expatriates as well as the indigenous population and would be regulated in those different markets.’
In Qatar, all Guardian’s advisers will have a qualification equivalent to level four by January 2014 and some will be level six qualified. Training will be the instrument through which the UK feeds and controls group-wide growth and quality, says Howell.
‘Our aim is to grow our own financial planners of the future by taking on graduates, which we have started doing, training them in the UK and overseas as administrators and paraplanners as a career path,’ he says.
Centralising investments for a global client base
Guardian has opted for a blended approach to investment, putting the core of client’s portfolios into passive vehicles with actively managed satellite funds.
Howell says this means the firm does not have to try to settle the debate with clients over whether passive or active management is the most effective investment style, and gives clients from the UK and elsewhere the flexibility to choose their own actively managed investments.
‘The clients can understand active and passive, and it is a big decision for them to make [to choose between] them. When some advisers cannot decide, how can you expect a consumer to? So give it to the experts where your core is passive but you want upside and that’s active but driven by asset allocation.’
Guardian uses Finametrica risk profiling to map out model portfolios while JM Finn & Co manages the money.
The firm also has a distributor-influenced fund, the Discovery Balanced managed by Quilter Cheviot. Guardian has been a co-sponsor of the fund for eight years alongside Winchester-based Antony Harding & Partners. The firms take an equal share on all decisions regarding the fund and sit on its investment committee.
Clients are put through a cashflow plan using Truth software and invested on one of two platforms, Transact or SEI.
‘Transact is good for trustees’ money, where we deal with lawyers and the money needs to go straight from the trustees to the client account. We use SEI because it is international.’
Howell says the process applies group-wide, meaning overseas offices will not be putting their clients into esoteric or unsuitable investments. ‘It’s a robust investment process.
Core-satellite asset allocation
Guardian uses a core of passive iShares exchange traded funds. For peripheral active managed funds, JM Finn will choose the fund manager but it is driven by the asset allocation.
The firm’s use of JM Finn is recent. Until the past few weeks Guardian used various discretionary fund managers (DFMs), each of which would fulfil a different part of the mixed active-passive mandate.
‘We changed because we wanted something consistent and robust, and repeatable,’ says Howell. ‘In the past the DFM was [either] active or passive. Now our house view is a blended approach, and with the specialists we use we have mapped model portfolios that are rebalanced.’