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It’s all about investment returns!

Being different from your competitors is not enough for a business to flourish, we need to be better!

That is why we developed Generation Wealth Management’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 Wealth Management?

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.


Retaining profit in a business makes good sense, especially in tough trading conditions, but keeping too much in the bank can put the businesses cash at risk if things go wrong.

My business is my pension – or is it?

Following some excellent trading years, the three owners/directors wish to draw retained profits from the business in a tax efficient manner, as they are concerned that they have too much cash. Furthermore, although they saw the businesses eventual sale as part of their retirement planning, they didn’t wish to rely on this.

Taking additional income from the business by way of salary or dividend would have resulted in more tax to pay and as they also wanted to fund for retirement outside of the business, they considered a pension plan as a suitable way forward. However, they realised that the complexity of pension planning meant they would need advice. After the initial fact finding audit, we were able to ascertain their requirements and affordability. It was of course essential for them to retain adequate cash in the business, but this still left them with circa £400,000 to extract.

Our recommendation was to implement a Directors Pension scheme and by using maximum pension funding and carried forward allowances we were able to extract £399,000 tax free. This reduced the taxable gain for the company within the trading year. We also consolidated previous individual pension plans into the new Directors plan, enabling them to utilise the services of a bespoke Discretionary Fund Manager* to manage their pooled funds. This reduced cost and improved risk management.

The Directors 5 year plan was to continue maximum funding in order to purchase a new trading premises within the pension scheme as tax efficiently as possible.


Bespoke pension advice will allow the Directors to achieve their goals of extracting and protecting capital, funding for retirement and their new goal of purchasing their own premises through the pension.

* click here for further information on our Central Investment Proposition

Charles, a divorced gentleman in his late 50’s with one adult child, had a very specific retirement target. This was great news as we were able, with the use of our retirement modelling tool, to advise him on the level of retirement savings required. We recommended a mix of tax efficient Pension and Individual Savings Accounts (ISA) funding.

Some 10 years later and on target, Charles decided to retire.

He had always been a cautious investor and in retirement, perhaps even more so. Our task was to therefore ensure he could retain lifetime income with minimal risk to capital, but still maintain his income target and allow for inflation. He was less concerned about leaving retirement funds on death as his son had a successful career and would inherit a substantial property.

Having analysed his basic living expenditure we recommended that this was funded from a ‘Guaranteed Indexed Linked Annuity’. This would give him peace of mind that crucial costs would always be paid for. The remainder of his savings would continue to be invested in cautious investment funds within a flexible drawdown plan, and used for non-crucial expenditure such as holidays, new car, gifts etc. This expenditure could be decided upon year on year dependent upon fund value and performance, but should in any case cover his planned additional lifestyle expenditure.

We were also able to plan for tax efficient income in retirement by using a blend of ISA, tax free cash from pension and pension income, thus reducing his tax burden.


Charles is now happily retired, enjoying spending time with his grandchildren, safe in the knowledge his income is appropriate to meet his needs, now and in the future.

Geoff and Clair, had built up pension savings in a number of plans over the years as well as building good levels of capital in their bank. Although they had a rough plan for retirement they didn’t really know when they could afford to stop work, but did have a wish to retire as early as possible as Geoff was conscious of his family history of early mortality. They had fairly modest living costs but did want to travel and explore the world and hopefully spend some time abroad in the winter sun.

After initial investigation we were able to ascertain the level of their total assets and a detailed breakdown of expenditure. This allowed us to use our Retirement and Cash Management Software and build an accurate picture of when they could retire and meet their expenditure goals. The software not only allows in-depth retirement planning but also calculates the best tax position for the client.

In their particular circumstances the current level of assets and savings was inadequate for them to realise their dreams and therefore additional saving was required. We were able to introduce modest change to the tax efficiency of their portfolio and regular savings by using ISA, Pension and Capital Gains Tax planning. We were also able to introduce a further level of retirement planning, allowing them to phase retirement over a period of time, thus allowing them to partially retire earlier than anticipated.


With careful planning and budgeting you can help ensure you have enough capital to retire and achieve your goals. Our advice is to take advice, use planning tools and most importantly start planning as early as possible.