Andrew Ratcliffe, director of PCH told International Adviser that the firm takes a goal-based approach to wealth management. “We try to dive a little deeper, to deconstruct the whole investment process and apply our investment science.
“We focus on talking to clients about their goals and dreams, and also their fears and concerns. We deconstruct these into specific goals, which might achieve lifestyle, legacy, philanthropy or other objectives.
“We then apply an investment science, setting targets in terms of a specific risk/return matrix around that goal, as opposed to doing a psychometric test and putting the whole thing in one pot.”
He credits this strategy with helping to create an award-winning wealth management and financial services operation during the past 25 years by building on the concept of ‘good advice’.
Founded in 1990 as a corporate tax consultancy practice in Cape Town, its current incarnation is more of a family office where the focus is on offering a full range of services for its clients.
Firm foundations
“We have no institutional parent and are not owned by a bank or life assurer. Our process is strictly advice-driven, as opposed to being based on product sale. Everything we have built is based on sound advice,” says Ratcliffe, who heads up the wealth management division.
PCH is one of the larger independent wealth management companies in South Africa, offering everything from tax and accountancy services through to asset management and portfolio advice to banking and fiduciary services.
“I started my career as a tax manager doing the tax work. As the needs of our clients grew over the years, we added more services. By 2000, we had launched our asset and wealth management and fiduciary services.
In terms of revenues, Ratcliffe says the wealth management and portfolio management services are about 60% of the business.
Fiercely independent
In terms of products recommended to clients, Ratcliffe argues that PCH’s independence is a real differentiator. “Being fiercely independent ourselves, we would research the market and try to identify what’s best for our clients, but at the same time, try and keep more deep and meaningful relationships with a select few suppliers, and not try and keep the entire market happy.”
He says wealthier families in South Africa tend not to want too much concentration of risk in their portfolios, so are always looking abroad. Many have established their own international portfolios, or may have been beneficiaries of offshore money.
As a result, in terms of asset managers, PCH looks beyond the main local firms to the likes of Canaccord, Brooks Macdonald and Pictet, and uses Saxo Bank as its offshore stock broker.
“We manage a lot of our clients’ money from here but we certainly are not arrogant enough to believe we can do it all ourselves. We’re happy to partner with international trust companies and fund managers.”
Themes and schemes
Many of PCH’s clients also have offshore pensions and so it has done Qrops business but Ratcliffe says the market is pretty fluid at present.
“Qrop schemes are certainly something we would assist our private clients with, and we have relationships with people in Gibraltar and similar jurisdictions, but it’s not a big part of our business.”
In terms of offshore bond wrappers, Ratcliffe says these products can make sense for clients in the higher tax brackets.
