While it acknowledges the importance of a bedrock in fixed income, Loudon says the firm is a long-term equity investor and, as such, it tends to invest in direct stocks in the UK. Internationally, it uses a mix of direct stocks (mainly in the US and European market) and third-party funds.
Most recently, Loudon says, Quilter Cheviot refined its portfolios following the base rate cut announced by the Bank of England.
“We have reduced our exposure to cash and put that into equities, half UK, half international, 2% each.”
This move means a typical portfolio currently has around 70% in equities with a slight leaning towards international equities.
But, he adds: “It is still too early to be judging the fate of the UK. We are still at the fact-finding stage about the environment in which we will find ourselves.”
The committees also allow for the voices of the regional investment managers to be heard, which Loudon says is important as they are a significant part of the group.
The Birmingham office, for example, of which Loudon was formerly head, was a greenfield site in 1994 and now accounts for about 10% of the firm’s total AUM.
According to Loudon, the importance of the regions has changed over the years. “At one time there were many clients that would not consider having a broker that was not in London,” he says, but increasingly because of technology and security it is possible to have strong businesses there.
He says: “If you are setting up a regional office, you have to do it properly. You cannot go in on a fishing trip and come out again, you have to set up your brass plate.”
He adds, if you do not do it properly, it is easy to conclude it does not work. In Quilter Cheviot’s case, the 11 offices outside of London account for about 45% of total AUM.
“There are not many firms with that sort of AUM outside of London. It is about ensuring you can deliver to those managers the same level of service they would get in London. Technology has made that possible.”
And, it is not just a better regional presence that technology has facilitated. According to Loudon, it has affected the industry in a number of ways and anyone that believes it is unlikely to continue to advance “probably is not thinking things through.”
Staying safe
Loudon does not believe the demand for wealth managers will wane. “Lots of new and potential clients will be more knowledgeable in the future. They will have done more research online but, despite that, evidence shows people still like to talk to people, and to have a person as one’s first point of call.
“It is about confidence and security. That is unlikely to be easily replaced by technology.
“The client of the future is likely to be better informed but I still think many are unlikely to do anything without having that meeting first.”
Asked how the deal with Old Mutual has changed things, Loudon says prior to the acquisition the firm was owned by private equity house Bridgestone.
