Where W1M might fit into a DFM panel

Selecting the right investment management partner(s) is a crucial decision for financial advisers and when doing so it is of vital importance to consider factors such as price, performance and service. Another critical factor in the due diligence process is the investment philosophy of a potential partner.  

Many of the advisers we work with have an established range of managers to cover passive solutions, an active approach, and ‘something a bit different’. For those not familiar with W1M, this article looks at how we might fit within a panel of providers for Managed Portfolio Services (MPS), multi-asset funds, or a more bespoke portfolio solution for the latter two categories. 

As an active investment manager

While investors have debated the merits of active and passive investing for some time, W1M firmly believes in the power of active management. Through in-depth research and the skills of our experienced and dedicated investment professionals, we seek out investment opportunities and build portfolios that have the potential to outperform their benchmarks and support client outcomes in various market conditions.

This approach allows the investment team to respond swiftly to changing market dynamics and capitalise on emerging trends. By prioritising active management, we aim to deliver superior returns for investors over the long term.

...with global expertise

One of the key strengths of W1M Investment Management lies in our global investment approach. By adopting a comprehensive view of the world's markets rather than a focus or bias towards the UK like many of our DFM competitors, we enable advisers and their clients to gain exposure to a diverse range of markets and the best ideas globally.

The UK currently makes up approximately 2% of the global index but is often closer to 20% within UK DFM portfolios. Our position is more globally diversified, as shown in Figure 1.

This global approach often appeals to clients, in some cases for those who perhaps already have an exposure to UK-markets through property or legacy holdings.

Figure 1.

Source: Waverton and peer factsheets. As at 31.12.22. The weightings are calculated as a percentage of the Waverton Balanced platform model portfolio and the peer group equivalent. MSCI AC World weighting assumes a 60% allocation to equity. The above should be used as a guide only and is subject to change.

Selected peers: Brewin Dolphin, Quilter, Brooks Macdonald, Vestra, Evelyn & Partners, ASI MYfolio III, Vanguard Lifestrategy 60% Equity.

...and a direct investment approach

Another distinguishing feature of W1M is our commitment to direct investment. Unlike a fund-of-funds approach, where investment responsibility is outsourced via a selection of underlying third-party funds, W1M portfolios are built by predominantly investing directly in bonds, equities, and alternatives. This approach offers several advantages, including greater control over investment decisions and access to a wider range of investment opportunities.

This style of investment is often a good fit for advisers and clients who appreciate the transparency of a directly invested portfolio. The style of investment has also seen the development of our proprietary downside protection strategy. This is a collection of derivative instruments which could collectively be referred to as ‘long volatility’. This type of investment can be difficult for other managers to access, especially so on adviser platforms.

To enable this approach on adviser platforms, our MPS has a genuinely innovative structure, comprised of four ‘building block' funds which are run by our dedicated investment team specifically for the W1M MPS and are managed on a coordinated, cohesive and complementary basis. We then offer strategic mandates made up of different proportions of these components to cater for different risk profiles. 

Bespoke solutions for advisers and clients

W1M understands that each adviser and client relationship has unique requirements. Therefore, we build strong relationships with advisers and collaborate closely, offering solutions across MPS, multi-asset funds and bespoke portfolios. By taking the time to understand the specific needs, risk tolerances, and investment objectives of clients, W1M aims to provide portfolio strategies that align with their long-term goals.

An example of this is the CPI+, or ‘real return’ objectives, rather than peer group or benchmark objectives of our portfolios. This decision was made in conjunction with our adviser partners and is applicable across all of our solutions.

For this reason and for our demonstrable record of strong risk-adjusted returns, we are often shortlisted on panels as an active manager of choice. Increasingly, we are seeing advisers blending W1M portfolios with a passive investment solution for select clients. This can be to further diversification, to hedge risk or to lower overall costs. The growing momentum of blending active and passive strategies is particularly evident on select adviser platforms.

As 'something a bit different'

In a landscape where investment management partners are plentiful, W1M distinguishes itself by offering a compelling proposition to advisers looking to establish or enhance their DFM panel. With an active management philosophy, direct investment approach, and expertise across bonds, equities, and alternatives, W1M is well-positioned to assist advisers in meeting their clients' investment objectives effectively.

...that's independent and aligned

W1M are an independent investment management business. We are not aligned to a global bank or asset manager, and with significant employee ownership, we are truly aligned with our clients.

...with expertise in alternative assets

W1M's multi-asset team manages an Absolute Return Fund and a Real Assets Fund, which provide access to property, infrastructure, commodities, asset finance and specialist fixed income.

By collaborating closely with advisers, W1M builds enduring partnerships to deliver superior investment outcomes for clients. We would like to thank our existing supporting advisers for their support, notably over 2022 where over £1bn of our total firm net inflows of £1.4bn were via our financial adviser partners, of all sizes from across the UK.