What are some of the biggest challenges or concerns that clients share?
Michelle: Our clients hail from many different backgrounds and professions. However, a common thread is that most of them want to discuss how to avoid the inflation erosion of their cash. As we are now seeing inflation potentially reach peaks of between seven and nine per cent, this is definitely the biggest driver for investing right now, despite concerns about valuations and geopolitics.
Of course, they are also very focused on managing the level of risk they are exposed to when they invest in a portfolio of liquid assets.
Kartik: Our entrepreneurial clients often have a large amount of capital invested in their own businesses and want to know more about what to do with that value should they extract it from the corporate entity.
Maintaining the value of their cash – or purchasing power – is important to them, so we look at investment management in the context of their overarching financial and family goals, as well as their current life stage.
What are the common misconceptions people have about wealth management and financial planning?
Michelle: I think one of the main misconceptions is that wealth management is expensive and doesn’t offer value for money. At Investec however, we deliberately design our solutions to be as cost-effective as possible, while still delivering all the expertise and market exposures that clients want.
The other misconception would be that all banks provide a similar offering. For example, within the Investec Private Office, when it comes to discretionary investment management, we're building portfolios which are really quite different to the traditional solutions offered elsewhere. We invest according to strategic themes and based on market opportunities, as opposed to simply creating benchmark exposure for our clients. We also invest in non-traditional securities where it makes sense to do so. For example, we currently hold a structured product in the thematic portfolio that gives us innovative exposure to the US yield curve.
Kartik: From an entrepreneur's perspective, we are often asked whether a client’s business is established enough, or if an individual has enough assets to be eligible for our services. However, at Investec we build long-term relationships in order to support individuals and their families with their wealth journey. We can help with financial planning from the outset, including making sure entrepreneurs are tax-efficient and have the right administrative support in place.
We invest according to strategic themes and based on market opportunities, as opposed to simply creating benchmark exposure for our clients.
How is Investec supporting clients during the Ukraine crisis?
Michelle: From an investment perspective, we are staying close to our clients during this period of uncertainty and monitoring our portfolios closely to ensure the correct level of risk exposure is maintained, while also making sure that we are being nimble where appropriate. Our underweight equity position at the start of the year has helped to protect portfolios and dampen the volatility that our clients are experiencing.
In such a volatile period, additional risk is taken when transferring portfolios to a new wealth manager in cash, as values can change dramatically in a very short time. Accordingly, we look to mitigate this risk by managing the transition carefully. We often transfer existing holdings over in specie when appropriate and this helps us to manage any time out of the market.
Kartik: We also reassure our clients by maintaining an open dialogue. We try and educate and inform our clients as much as possible, including sharing content from our research team and wider business on a regular basis.
Is the new financial year a good time for clients to speak with a wealth manager?
Michelle: At the end of each financial year, it is essential that we make sure all appropriate tax allowances have been utilised, especially those which can be described as ‘use it or lose it’ opportunities. This includes contributing to ISAs, funding Junior ISAs and maximising pension contributions.
At the start of a new tax year, we can begin this process again for the whole family. By making contributions at the beginning of the tax year, we can ensure clients benefit from the compounding of potential returns over a longer period.
Beyond this, our understanding of complex income profiles allows us to work with clients to consider financial structuring ahead of forthcoming liquidity events and payments such as bonuses or carried interest.
Kartik: I’d add that I think it's always a good time to review your finances and your wealth management. Good wealth managers will be constantly engaging with clients and making sure that their strategy is always right for them.
I think it’s always a good time to review your finances and your wealth management. Good wealth managers will be constantly engaging with clients and making sure that their strategy is always right for them.
In your opinion, what are some of the benefits of working with Investec?
Michelle: Our ability to work holistically to provide credit, banking, financial planning and investment management solutions is a key advantage.
Our teams are also aligned by client profession or source of wealth, which helps us to have an in-depth understanding of an individual’s income, needs and objectives.
How is Investec supporting entrepreneurs?
Kartik: We know entrepreneurs often have less time to focus on their personal finances than their business affairs, so we work with them to gain a clear picture and plan for their future goals.
This support comes in a variety of forms. We can introduce them to funding opportunities through our dedicated IPO team or private equity team if they are looking to grow the business. When they are preparing to sell their business, we can help them interpret their valuations and financial needs in the context of the current economic climate.
Is ESG something that Investec is incorporating into its approach?
Michelle: Our Research Team incorporate Environmental, Social and Governance (ESG) factors into our investment analysis as standard across all asset classes. Separately, we are a signatory of the UK Stewardship Code, which guides how we evaluate and influence the businesses we invest in, in order to support the environment and wider society.
We also offer several portfolios specifically tailored to ESG criteria.
The value of your investments can go down as well as up and you may not get back the full amount invested. Your capital is at risk. The information contained in this publication does not constitute a personal recommendation and the investments or investment services referred to may not be suitable for all investors; therefore we strongly recommend you consult a Professional Adviser before taking any action. Separate eligibility criteria, terms and conditions apply to Investec Wealth & Investment Limited and Investec Bank plc.