It’s all about investment returns!

That is why we developed Generation Charity Consultancy’s – Central Investment Proposition

Our Methodology.

As an independent financial adviser, we need to decide how to invest our clients’ money, whether in pension, ISA, or other investments, and how we ensure their portfolio is performing to the best of its ability. This decision will also be based upon whether to manage funds in-house, or to outsource to an organisation with specialist expertise and substantial resource.

In 2008 our Investment Director, Shai Patel, following substantial research and due diligence, concluded that employing the services of Discretionary Fund Managers (DFM) who could provide clients with excellent portfolio and risk management, was the best outcome for clients.

The principle was built around four key pillars of our Central Investment Proposition and we remain today, still passionate about these core deliverables:

  • Bespoke Active Discretionary Fund Management.
  • Active Asset Allocation.
  • Active Risk Management.
  • Selecting Only ‘Best of Breed’ in Discretionary Fund Management.

By adhering to these principles, our aim is to identify the top performing risk adjusted performing managers, ultimately helping to reduce investment risk and provide a superior investment experience for our clients.

During the process of selecting a Discretionary Fund Manager, Shai was surprised by the breadth of inconsistencies of many managers, whether through the lack of performance, service standards or risk management, making selection of the right investment manager an extremely difficult job. Furthermore, the lack of performance transparency in the sector made it virtually impossible to assess how well your money was being managed and making your investment manager accountable for any lack of performance.

He had clearly identified an issue in the sector. Over the following years Shai developed, in partnership with a leading firm of investment analysts, a new and extraordinary way of selecting and consistently reviewing Discretionary Fund Managers and our clients’ portfolios.

Why Use Discretionary Fund Managers?

Our selected fund managers have significant resource for market, fund, and stock research, generally with a dedicated analyst in each asset sector. This enables greater due diligence to help minimise risk, identify buying opportunities and optimise returns.

They fully understand worldwide market data, helping to construct portfolios based on macro and micro-economics.

They add value by targeting themes, delivering economies of scale, reduce cost by accessing cheaper institutional investment and direct equities.

Active management on a discretionary basis will help reduce asset allocation “drift” and this will ensure clients’ portfolios remain within risk parameters.

How Do We Select A Discretionary Fund Manager?

Clearly, we needed a method of selection and regular review of not only the fund managers, but of each client’s portfolio to ensure the fund manager was still performing as expected.

We were therefore very proud that Shai’s vision became the core of our investment proposition.

There are over 200 Discretionary Fund Managers in the UK, investing for hundreds of thousands of clients, so ensuring we select the best company and the best manager within that company is challenging. For example, not all fund managers are good in all risk categories; not all offer a truly bespoke service, and of course, some of them just offer poor performance.

Bear in mind, just because a portfolio has increased in value, does not mean it is performing well. Even a poorly constructed and managed portfolio will increase in value in rising stock markets. The true test of performance is the ability to see how it fared against its competitors. Has your manager achieved a better risk adjusted return than his competition; have they given you a better return, but taken less risk; or have they taken greater risk but achieved a higher return?

To answer these questions, we are proud to have developed a sophisticated fund review service which compares fund managers on a peer-to-peer basis, allowing us to identify ‘quarterly’ who the best managers are.

The process of selection starts with comparing data from the wide selection of Discretionary Fund Managers, to ensure that we only select those that offer consistent above average performance and thorough risk management. We undertake this review every quarter to ensure our panel (which we call ‘The Matrix’) is up-to-date. It is from this selection we recommend the appropriate DFM to you, based on size of fund and the risk you are willing to accept.

Once You Are A Client It Doesn’t Stop There!

Reviewing your portfolio is crucial, so we continue with the same high level of governance as we did when selecting the DFM.

Every three months our review service compares data from over 250,000 live client portfolios to your own portfolio. We call this a ‘Peer-to-Peer Report’ and it allows us to see if your portfolio is a top performer when compared to other portfolios in a similar risk category.

This means we can quickly react to any under-performance, identify any negative trend, and take appropriate action, including moving fund manager if necessary.

Effectively, our job is to ‘police’ the Discretionary Fund Managers for the benefits of our clients, clearly taking active portfolio management to another level.

We are confident we are one of only a handful of Independent Financial Advisers in the UK offering this method and level of governance.

Why Generation Charity Consultancy?

We are of course aware that you are going to look carefully at a number of advisers and that’s why we have invested substantial time and money in developing a sophisticated approach to investment governance, thus providing a very different proposition to many competitors. Hopefully, the above detail will give you confidence in our ability and encourage you to talk to us about your own investment requirements.

Important Caveat

Of course, we will not recommend Discretionary Fund Managers to all investment clients as this route may not prove suitable, so we will undertake an initial audit of your financial position to decide what type of service and product is right for you. Please be assured we follow high levels of due diligence for all services we provide.

Please talk to us about how we can improve your investment outcome.

Our analytical quarterly Peer Reports take data from circa 250,000 live client portfolios to ensure your manager is a credible performer and is managing risk appropriately.

This ensures that each quarter you can be confident that the portfolio is reviewed, with appropriate action taken if required.

Investment performance – managing the risk

A sport related charity approached Generation Charity Consultancy with a portfolio of £30million, invested directly with a large Discretionary Fund Manager. Their monitoring of the portfolio consisted of an annual presentation from the fund manager and measured against a target set by the fund manager, a fairly standard approach.

We highlighted that any fund manager review would only be a positive one as the DFM would not risk the relationship by highlighting their faults or peer underperformance. This was further underlined by the public reports & accounts where they confirmed the benchmark was the FTSE All Share & UK Fixed Interest.

However, the same document confirmed the portfolio was a globally diversified portfolio. Therefore, the performance presented to the Charity looked like they were performing well but against a completely irrelevant benchmark. This approach is clearly smoke and mirrors and unfair to the investor.

The charity asked us for an independent review of their current arrangement and our recommendation was to move to a bespoke portfolio with targets set by us and the client.

Too often we see fund managers targeting some standard indices with no relevance to your portfolio’s asset allocation.

Their fund name will generally not confirm the nature of the fund (e.g. Cautious, Balanced) but rather just be called “Charity Fund”

Charity investment – maximising growth

A charity approached Generation Charity Consultancy having invested £26m in a popular balanced multi asset fund, which had achieved 33.2% growth over the last 5 years. On the face of it the charity was happy with the performance. However, our peer analysis* of over 250,000 investor records confirmed a competitive return for that time period and risk profile should have been 41.6%, not the 33.2% achieved – that equates to a difference of over £2m. That sum could make such a difference to any charitable organisation and its beneficiaries.

This highlights why it is crucial to compare the whole market, and therefore understand who the consistent performers are by regularly reviewing peer performance.


By undertaking a regular independent review we ensure our clients’ portfolios have greater potential to maximise growth within the chosen risk profile.

* click here for further information on our Central Investment Proposition

Faith, ESG, Ethical, Sustainable – it’s a confusing world!

Investing ethically can be extremely complicated for clients to appreciate. What is considered ethical or sustainable to one person might not be to another. Understanding the impact of ESG can be even more challenging and even the fund managers have different approaches to the same theme.

There is significant disparity between how fund managers approach this subject, that’s why taking professional and impartial advice (not solely from the fund manager) is crucial.

Faith concerns needn’t be a worry

Generation Charity Consultancy recently spoke to a church charity which had £7m invested in a fund launched over 10 years ago, specifically to follow the ethos of their faith.

However, since launch the fund had grown into a large multi-asset portfolio with over 33% invested through other manager funds.

The Trustees however didn’t appreciate that the external funds being used were not being managed with regards to their faith and ethical restrictions. In fact it was invested in Stocks that were specifically ‘excluded’ from their Statement of Investment Principles.

The charity moved to a bespoke Discretionary Fund Manager* which followed the charities investment wishes to the letter.

Only deep analytic research can identify the underlying assets.


Our service ensures all mandates remain aligned to the charity’s requirements around faith, ethics or ESG.

* click here for further information on our Central Investment Proposition

Analytical peer-to-peer reporting from approximately 250,000 live client portfolios will quickly tell us if your fund manager is a consistent performer or a clever illusionist.

In simple terms we believe in ‘trusting the maths’, ensuring your money is invested with confidence.

Target – But who’s target?

A charity with over £15million of long-term investments recently talked to us about their portfolio. They had the total amount invested in one well known charity investment fund. The fund information provided by the fund manager and on their website, confirmed it was keeping pace with their target yield of RPI + 3% per annum.

However, we were able to independently assess and report that the fund was consistently under-performing when compared to its peers investing in the same risk profile*. The charity trusted the figures supplied by the fund manager, which showed acceptable performance, but as we can see this was not so impressive when compared  to their peer group.

Trust can be delivered in different ways, but one consistent thing you can trust is the facts. However, you need to ensure you have all the facts, they are not taken on face value and suitable comparisons are made.


They were able to see that the performance, although meeting targets set by the fund manger themselves, was not great when compared to other fund managers offering the same risk profile.

* click here for further information on our Central Investment Proposition

Generation Charity Consultancy’s access to independent analysis from circa 250,000 live discretionary portfolios means our experts can build a robust selection process with continual reviews of the fund managers*.

Generation Charity Consultancy can, with confidence, align the charity’s risk profile, investment requirements or concerns (e.g. ESG/Ethical) with the most suitable fund manager for that portfolio.

Investment advisers – managing your charity investments and your risk

Generation Charity Consultancy was approached by a non-for-profit client with £2.5m to invest. The charity required access to fully liquid passive solutions with a bespoke fund manager and the total cost – including our fee – needed to be less than 1% per annum.

Assessing their risk as cautious, we were able to identify an active fund manager proposition with expertise within the company across both passive and active solutions.  Due to the passive mandate and our negotiating influence we were able to secure an annual management charge of 0.4% which enabled the fund manager and ourselves to easily meet the sub 1% overall costs.

As Independent F.C.S. regulated consultants, reducing fees, ensuring excellent investment performance and robust risk management is paramount.

* click here for further information on our Central Investment Proposition