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Finance Controller Appointment at Enhance Group

Enhance Group Limited (Enhance) are delighted to welcome Fergus Gibson as Financial Controller.

Fergus, who will take responsibility for all aspects of the Group’s finances, joins Enhance from a global intermodal container leasing and finance company where he was the Finance Director.
Fergus started his career with PricewaterhouseCoopers. He worked in the financial services environment for more than 15 years spanning a range of sectors: Audit & Business Advisory Services, Banking, Container Leasing and Asset Management. Prior to that, he worked for BlackRock in London as a Business Partner supporting the firm’s Global Retail Business with their expanding onshore and cross-border Retail fund ranges. Fergus is a Fellow Chartered Certified Accountant.

Tom Wiseman, Group CEO, commented:

“I am delighted to welcome Fergus to the company. His experience is of great value to our organisation and he joins our team of talented people who will lead the company forward”.

New Head of Investment Consultancy at Enhance Group

Enhance Group Limited have appointed Dr Ruzhen Li as Head of their Investment Consultancy offering.

Dr Li, who is based in London and previously held the position of Head of Research has been with the company for 3 years.

Before joining Enhance, Ruzhen was one of the founding members of investment advisory firm LJ Athene Advisory Ltd, a company that was established after a Management Buyout of Deloitte Private Client Services Limited, where she started her career, completed her CFP and then became a CFA Charter Holder.

Ruzhen completed two first class engineering degrees simultaneously in Shanghai Jiao Tong University in China and was subsequently invited to pursue a PhD in Computer Modelling in Biochemistry with Queen Mary University of London on scholarship from the Government (ORS) and the University itself.

In her position as Head of Investment Consultancy at Enhance, Ruzhen will continue to actively advise on international families who require tailored outsourced investment solutions.

Enhance Investment Consultancy (EIC) is a truly independent consultancy business, servicing global families who wish to have a team of highly qualified investment professionals on side as trusted advisors to source the best solution providers for their needs. EIC works closely with fellow professional advisors such as lawyers, accountants, trustees and tax advisors to make sure the investment solutions are consistent with other needs of the family.

Dr Ruzhen Li, commented,

 

“I am delighted to be taking on the position of Head of Investment Consultancy. I am very grateful that I have been given the freedom to build the consultancy business based on independence, research and service, supported by a very comprehensive reporting platform which the firm has built over the past decade. We’ve seen a great demand for our services both in London and abroad and I am very much looking forward to keeping the momentum and growing our client base”.

Tom Wiseman CEO of Enhance Group, commented:

“Ruzhen is a massive asset to our team and we are thrilled that she has taken on this new role. Having someone of Ruzhen’s calibre, with her extensive industry experience, qualifications and connections heading up our Investment Consultancy offering in London I am confident we will continue to develop our bespoke services whilst ensuring the absolute highest level of consultancy services”.

 

Enhance Group Announce New Chief Operating Officer

Enhance Group Limited (Enhance) are delighted to announce that Justin Simpson has been promoted to Chief Operating Officer.

In his new role, Justin is responsible for the on-going operations of Enhance Group, overseeing systems, product development and project implementation, and remains a director of Enhance Wealth Consultancy and chairman of the Investment Committee.

Justin has been with the company for over 8 years and holds the prestigious Level 7 Masters in Wealth Management from the Chartered Institute of Securities and Investments as well as the Investment Management Certificate.

Justin Simpson, new COO of Enhance Group, commented:

“I am really pleased to be taking on this new role as COO of Enhance Group. To have been a part of the growth and expansion of the company over the years has been a pleasure and I look forward to starting the next chapter of my career at Enhance Group”.

Tom Wiseman, Enhance Group CEO, commented:

“We are delighted that Justin has stepped up to this new role and that we have been able to promote from within the company. Justin has been an integral part of the team for many years, contributing greatly to the company’s global success. His skills, knowledge and experience are the perfect fit to take on this position and will strengthen our offering as we move forward and continue to grow”.

 

Enhance Group Announce New CEO and Executive Chairman

Enhance Group Limited (Enhance) has today announced that Tom Wiseman, currently the Managing Director of the London business, will become group CEO from the 1st October. Existing CEO James Painter will now take on the role of Executive Chairman.

Tom, who is a Chartered Member of the Chartered Institute for Securities & Investment (CISI) and has been successfully leading the London business for some time, will relocate to Jersey to take on this new role. James, who was one of the original founders of the business in 2005, will now focus on strategic direction at board level, as well as supporting the company’s global business development.

James Painter, former CEO and new Executive Chairman of Enhance Group added:

“Since the business was first created, we have averaged strong growth of 27% annually through delivering great products and a first rate service to clients internationally. Now that our experts who were sent out to establish the Company in Cayman, Geneva and Singapore have achieved their objectives, and the majority of the work is being facilitated from Jersey and London it was the appropriate time to increase our governance and management structure in our head office. In this regard I am delighted to be able to promote and recognise talent from within our team, which is why we are very lucky to have someone of Tom’s caliber ready to head up the business. I am confident with Tom’s leadership and fresh approach that the business will continue to grow and go onto even greater success and I look forward to supporting him in his new role.”

Tom Wiseman, new CEO of Enhance Group, commented:

“I am delighted to accept this new role as the CEO of Enhance. Over the last few years the company has gone from strength to strength and expanded into several new markets. My time heading up the London business has given me valuable insights into the evolving needs of our global clients and how we can provide the new products and services that they need. Jersey is a fantastic, high quality jurisdiction to base this business from, and I am also very excited to have the opportunity somewhere so beautiful.”

 

How big is the universe?

Author: Tom Wiseman, Managing Director, Enhance London

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There are several hundred Discretionary Fund Managers (DFMs) serving the UK fiduciary community. If this is extrapolated to other jurisdictions where the use of Trust structures is widespread then one can reasonably expect the number of relevant DFMs to multiply. How then can any Investment Consultant, let alone a Trustee, hope to rationalise this ever-growing universe and ensure that the advice they provide to clients on manager selection is truly ‘whole of market’?

This is a problem for which there is no practical solution. DFMs are complex entities with portfolio products that, unlike Mutual Funds, are not publicly traded and so there are simply too many in the market for any individual or firm to track comprehensively. Unfortunately, fee levels simply do not support research of this scale. However, there are some helpful independent peer group studies that offer respectable market coverage such as STEP Trustee Managed Portfolio Indices (TMPI) and ARC PCI

Such studies are funded by participating DFMs through annual subscription fees to provide the fiduciary community with a common platform for their due diligence. In many respects it is a marketing levy on DFMs – those that pay to participate achieve greater visibility with their client demographic and implicitly gain credibility for their commitment to industry transparency. The consultancy firms behind these studies are remunerated for their intellectual capital and the infrastructure required to provide the service.

Enhance Group powers one of these peer group studies, STEP TMPI. This is a free STEP member service with a universe of over 40 DFMs that submit real client portfolio data across three core risk profiles and several base currencies. Manager subscription fees are tiered to be as inclusive of the DFM community as possible with its study output and related tools such as the TMPI Focus List provided to STEP members for free. It is proving to be a very efficient conduit between DFMs and Trustees and is a helpful source of revenue to an important fiduciary governing body.

Like fiduciaries generally, Investment Consultants often refer to such studies as part of their ongoing manager research process and Enhance in London is no different in this regard. However, it is important to note that the TMPI universe is not representative of the broader universe of DFMs that we research to select our approved managers for consultancy clients.

Our ‘approved list’ for consultancy is an independent matrix of managers that we have identified from a far broader sample of DFMs, amassed over our 11-year history in the oversight industry. Our monitoring business provides a richer pool of DFMs for us to review, with real client data now received from over 700 investment offices worldwide. Performance is one of the four headline criteria we assess against DFMs, so receiving so much real client data through our reporting client base is an excellent way for us to identify outperforming DFMs for further due diligence.

We rely on our industry experience in senior investment management and research functions to quantitatively and qualitatively assess DFMs against other criteria: process, people and price. We do this through due diligence questionnaires, onsite manager visits and the use of third-party databases and analytical systems. Our approved manager matrix is our intellectual capital and this can only be accessed by our consultancy clients. Approval is not bought, it is earned by the DFMs we select and we stake our reputation on our manager selection prowess.

Our consultancy fees are paid solely by our clients, therefore it is in our interest to select and monitor the best possible DFMs on our client’s behalf. This cannot possibly be achieved through the TMPI universe alone because the market coverage is too thin, although it would be disingenuous to say that such studies are not useful industry proxies or that they could exist without a manager subscription model.

As long as appropriate measures are carried out, such as the Chinese Walls and additional independent research that we undertake at Enhance, clients can rest assured that they are getting and uniquely informed advice for their fees.

For more information about our manager selection process please refer to: http://www.enhancegroup.co.uk/our-process

You pay peanuts…

Author: Tom Wiseman, Managing Director, Enhance London

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In my world, offering good value for money is achieved through the provision of sound advice, exacting service and delivering positive long-term investment outcomes for clients net of all fees charged. It isn’t rocket science and I’ve always found that clients are prepared to pay fairly for personalised, professional advice.

However, I have reviewed a number of potential client engagements recently and had to dismiss them out of hand when their fee expectations came to light. The fees proposed barely covered the overheads of running such accounts, let alone the associated advice liability or allowing for a small profit.

Fee pressure is firmly downwards in the investment industry and investment consultancy is no exception. Advancements in technology and an increase in the number of market participants are partly to blame, but I can’t help but feel that consultants have inadvertently contributed to this skinny fee environment.

I have already waxed lyrical in this blog about some of the shortcomings of Investment Consultants, particularly the provision of a posh reporting service dressed up as consultancy, which enables firms to charge handsomely for their reporting whilst avoiding the costs implicit in providing well researched and qualified on-going advice.

I believe that this has created a distorted perception in the market of what proper consultancy is and the fees it should command. For this reason I have decided to publish Enhance’s fee tariff quoting both an hourly rate for project work and a tiered percentage fee subject to a minimum annual charge.

This tariff has been constructed on the basis that my team will adhere to the highest professional standards, employ the best research and reporting tools available on the market and with an acceptance that we can look after no more than 30-40 retained clients, perhaps significantly less.

Larger consultancy firms may benefit from economies of scale to a certain extent, but there has to be a profitable and sustainable baseline and we are prepared to publish ours in the hope others in the industry are equally sensible and embrace such transparency. After all, providing value for money and being cheap are two very different things.

For more information please see www.enhancegroup.co.uk/fees

The Benefits of Delegating Investment Oversight: Reduced Risk, Improved Performance

Author: James Painter, CEO, Enhance Jersey

James-Painter

In today’s low interest environment, it has become increasingly challenging for trustees to preserve and enhance the value of trust funds under their duty of care, as few asset classes currently provide a low risk solution that will likely outpace inflation and annual fees. Also, due to the need for consideration of the interests of both present and future beneficiaries, it has become almost impossible to generate acceptable returns without taking some risk. This creates a dichotomy that can be tricky to balance, as protecting the trust’s value in the present could potentially jeopardise its future growth. Getting this balance right requires successful navigation of the complex range of investment opportunities in today’s market, which is why many trustees are increasingly turning to discretionary portfolio managers and consultants for expert advice and assistance.

Donald Trone, former President of the Foundation for Fiduciary Studies, made the following observation, which summarises the position of the fiduciary in relation to investment activities rather well:

“The legal and practical scrutiny a fiduciary undergoes is tremendous, and it comes from multiple directions and for various reasons. It is likely that complaints and/or lawsuits alleging fiduciary misconduct will increase…. Fiduciary liability is not determined by investment performance, but rather on whether prudent investment practices were followed.”

What this means is that effective monitoring of both investment portfolios and investment management providers is more important than ever. Whereas settlors fifty years ago may not have been financially astute, today’s beneficiaries almost certainly are. The majority of beneficiaries today have a good understanding of the investment returns their trustees should have earned, bringing into focus not just how the manager was originally chosen many years ago but the monitoring that has since taken place to ensure the manager was continually up to the job.

This growing awareness on the part of beneficiaries has also contributed to a significant increase in investment related litigation. This litigious era is also a consequence of the fiduciary industry reaching maturity. It has become apparent that when trust funds pass to beneficiaries in today’s climate the duties carried out by the trustees, perhaps over many decades, come under scrutiny. Increasingly this has led to beneficiaries seeking legal recourse where they feel investments have underperformed reasonable expectations.

A further issue for trustees of this development is the unwelcome publicity that inevitably ensues when the courts become involved. Although the majority of cases pertaining to investment performance have been settled out of court, there remains a reputational risk for both companies and jurisdictions.

As a consequence outsourcing arrangements appear to be a current topic across international regulators. As an example, the following extract came out on 27th July 2016:

“The Monetary Authority of Singapore recently released outsourcing risk management guidelines putting a strong focus on conducting due diligence on service providers and materiality of outsourcing arrangements. The new guidelines, which took two years to finalise following a public consultation in 2014, replaced the old guidelines and have already taken immediate effect.” (Source: Bovill 2016)

The GFSC also alluded to the need for due diligence on service providers with its informative Thematic Review 2015 “Fiduciary Decision Making in Respect of Assets Under Trust”. In the introduction it states “Trustees are expected to ‘manage the investment and custody of trust assets professionally and responsibly. Common sense and good intentions are not sufficient to demonstrate that a trustee has appropriately discharged their duties in relation to trust assets. Furthermore, good corporate governance dictates that comprehensive documentation should be maintained, which in turn can reduce the risk of future litigation.”

To mitigate the associated risks and meet regulatory requirements and expectations it is clear that professional fiduciaries need increasingly robust processes for appointing service providers and investment managers. Whilst this can be done internally, the cost of doing so means that many trustees are considering delegating this to a trusted advisor.

Delegating this function to a reputable firm has two distinct advantages over the establishment of an in-house department:

1. Cost savings – The costs involved in running an in-house investment services function are considerable. The smallest team will require one senior qualified personnel, one junior qualified personnel and a data processor. Specialist systems are also required, including a market information terminal such as Bloomberg and a specialist review platform. This can bring the headline cost of such an internal function well in excess of £200k per annum.

2. Conflict of Interest – Providing investment services from a fiduciary business creates concerns over the targeting of retrocession, which can be perceived as a conflict of interest, interfering with a fiduciary’s independence and thus objectivity. By using a delegated function, this is completely removed as the initial decision to promote an Investment manager will be made external to the Trust. Furthermore, commission agreements have been abused in the past with IFA style arrangements such as 5% front-end fees being applied to initial investments. As a consequence, the use of commission arrangements between financial intermediaries has become slightly tarnished.

By leveraging delegation in the right way, it is possible to efficiently implement an investor services function in a cost effective manner without the need for complex systems or recruitment of specialist investment personnel.

For the beneficiaries, this means:

• improved potential for superior performance
• access to a broad spectrum of investment managers that are continuously monitored
• unambiguous objectives detailed in an Investment Policy Statement
• objectives that are matched with investment manager pedigree
• user-friendly, regular monitoring
• peace of mind

For the trustee the benefits include:

• the elimination of a cost centre within the business
• access to specialist, experienced and qualified resources without incurring costs
• A reduced risk of litigation due to improved strategy suitability
• robust processes for the regulator
• peace of mind!

An intelligent delegated arrangement drives up standards while reducing costs, delivering a positive outcome for all stakeholders in a fiduciary structure.

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