W&F Issue 1 2018

www.wealthandfinance-news.com 10 Wealth & Finance International - Issue 1 2018 Clear CM was founded on the premise that it could fill a niche that financial advisers and planners were crying out for. The theory was that these Regulated Financial Advisers (RFAs) were, more often than not, limited to taking products designed by investment managers for investment managers. Fundamentally, Clear CM was determined to redress the balance. The company’s senior partner, Martin Vaughan CFP, APFS is a Chartered and Certified Financial Planner with 30 years’ experience. When he is wearing his Chartered Wealth Manager’s hat, he is in a unique position to offer investments that are tailored perfectly for RFAs and their clients. With such a depth of knowledge and understanding of how financial planners work, and how they best achieve results for investors, Martin felt that he could finally offer something that was, perhaps surprisingly, very unusual in the world of investment management. As a financial planner, Martin spent many years sitting down with clients; understanding their aims, assessing their assets and liabilities, getting to grips with their true objectives, discovering their real attitude to risk and helping them to agree realistic assumptions. After this process, he would then work alongside them to create an appropriate financial plan, designed to give those clients a meaningful path towards the life they were seeking. But investors’ needs vary wildly. Some financial plans were much easier to produce than those for other clients, which did not always correspond with any of the actual investments that were available. This, according to Martin, was frustrating to say the least, as it also limited his ability to create an investment portfolio that enabled clients to fully achieve their objectives. “Financial planning requires a lot of work and input,” said Martin. “We might have known the right answers for achieving the perfect financial plan, but if the right product wasn’t there, we would be forced to find the closest compromise. “It was also very frustrating to see the way in which the client’s investments were often managed. When you drill down into a client’s individual needs, risk tolerance and objectives, it was not always a question of them wanting growth above all things. Yet the desire for growth was sometimes the only consideration for some investment managers.” It is true that a financial planner’s role is to ensure that the various taxation wrappers used to house the client’s assets are used as effectively as possible. But a client can have many different objectives. It may be a question of whether they want to take an income from their investment, and whether they want this income to be for the same amount each time it is paid. They may have different investment objectives for each taxation wrapper, or they have a greater or lesser ability to weather the ups and downs of the investment markets. Martin spent many years as a director of a stockbroking firm which also had discretionary investment permissions and its own in-house funds. He quickly learned that his background made him somewhat of a rare species and, on many occasions, was utilised by the firm to provide a link between the financial planners and the investment managers. This experience not only confirmed his belief that communication between investment managers and financial planners could be vastly improved, but it Investment managers come in all shapes and sizes. Whether they are stockbrokers, work for large fund houses or operate as one-man bands, there’s no such thing as a typical investment manager. However, Clear Capital Management LLP (Clear CM), named as Best Discretionary Portfolio Manager in England 2017 by the Wealth & Finance Awards, believes it certainly falls within the category of “untypical” investment manager. An Investment Company with a Difference FI170020 gave him all the tools to set up his own investment management company, Clear CM. Clear CM creates investment portfolios that are built specifically for financial planners. Even the choice of the name ‘Clear’ was deliberately designed to reflect Martin’s commitment to cutting out the jargon and aiding communication across all areas. The company has now constructed innovative investment portfolios where the reduction of volatility, and the ability to be able to allocate to the right asset class at the right time are of strategic importance. Currently, Clear CM offers a range of six “Classic” portfolios with varying degrees of risk. These are not too dissimilar to the types of portfolio offered by many DFMs. But the company also offers a range of Absolute Return Fixed Weight (ARFW) portfolios, which is quite uncommon. The key benefits of these is that they provide lower risk* and lower volatility than standard portfolios, largely due to the inclusion of a fixed interest “anchor” within its asset mix. This strategy has previously not been available on Model Portfolio Services managed on UK platforms. Ultimately, Clear CM’s strategy appears to be paying off. Up to the end of September 2017, even his lowest performing portfolio had outperformed its benchmark by more than 38 per cent since inception**. This is certainly an investment management company we could all learn from. *Note: All investments carry some risk. **(Source: Clear Capital Management LLP) Note: Past performance is not a reliable guide to future results.