Strategic Insights | Being a client of IQ

Strategic Insights | Being a client of IQ

Financial Planning
Published October 18, 2020

What you should expect from us

The answer is – at least in part – quite straightforward: our clients want a premium wealth management service comprising detailed financial planning that takes all their aspirations, goals and values into account. But really… that’s just the bare minimum. It stands to reason that any financial adviser worth their salt should know everything there is to know about wealth management and asset allocation, and the various procedures and practices which govern them. So why should you choose Investment Quorum to help you safeguard both your future and the future of those close to you?

Why smaller can be more visionary

One of the services that IQ offers is discretionary fund management, for which we use asset managers. IQ understands that asset managers do not necessarily get better when they get bigger. This holds true in particular for active managers: bigger often means mediocre. Investment firms often become victims of their own success. Once the assets under management balloon, making successful investment decisions becomes significantly more challenging. It becomes harder for the junior analyst with a good idea to get heard in a larger firm. And within the firm, it becomes harder to make money out of smaller companies (which are often the ones involved in developing disruptive technologies) because of liquidity issues, meaning they tend to focus more on larger cap companies.
IQ is agile enough to be able to go in and out of smaller fund manager groups, and boutique fund managers are often known for their focused expertise on a certain asset class, giving them a nimbler edge when it comes to allocating money.

What you can also expect from us

Time and time again, our clients tell us how exciting it is to deal with wealth managers who really are passionate about what they do: enthusiastic people who come to them with genuinely interesting investment opportunities that have come about as a result of innovation and blue-sky thinking. But our wealth managers being able to do their job so well is contingent on our investment team doing its research, analysing the markets and making the right decisions. And that’s where we really deliver.

Buying the disruptors: not the disrupted

Our investment team is made up of experienced and budding futurologists. They devote their time and energy to formulating a detailed understanding of the past and present, exploring the possibility of future events and trends. They are obsessed with avoiding mistakes such as the one IBM made when it failed to predict that the PCs that followed the launch of the Apple 1 were eventually going to overtake the mainframe. Or the one that the CEO of the now-defunct Digital Equipment Corp made back in 1977 when he declared that there was “no reason that anybody would ever want a computer in their home”. Or even the one that Microsoft’s Steve Ballmer made when he predicted “there is no chance that the iPhone is going to get any significant market share. No chance”.
Steve Jobs put it as well as anyone could back in 1997 when he raised a glass to the “crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes… the ones who see things differently”. As Jobs concluded, “the ones who are crazy enough to think that they can change the world are the ones who do”. Those are the people that IQ wants to know all about.

Quality companies

Investing and dealing with volatility go hand-in-hand. But because we are part invested in disruptors… in high-quality, robust companies, we tend to lose less when the markets go down. As IQ’s Chief Investment Officer Peter Lowman explains, “these disruptors are companies that will survive through any cycle and be able to endure through any crisis”. The only stipulation is taking the long-term view: the longer our clients have been invested in our strategies, the better they have performed. “Once we buy a position, we tend to hold onto it”, says CEO Petronella West, and the returns are the rewards for being able to tune out all the day-to-day media noise and hysteria (the 2008 financial crisis, the euro crisis, Brexit, Covid…), control one’s behavioural emotions and focus more on the fundamentals and the future of the exceptional businesses that we buy and own.

Sticking to the roadmap

Things are bound to get tricky along the way. But one of the things at which IQ excels is picking up the phone and providing reassurance, explaining to clients exactly why it is that they should stay the course, look to the horizon and weather the storm. When such large sums of money are at play, we know just how essential communication can be.
“At IQ, we contextualise everything within the framework of a financial roadmap and we make absolutely sure that we understand what a client’s end goal is”, says Petronella. “If we know what that goal is, then we can understand the amount of risk that whatever strategy they have subscribed to can withstand”. The way we see it at IQ, financial planning can only really be effective if there is a clearly defined roadmap in place to govern it – so that the investment strategy can do the job that it is meant to do.
When IQ clients come to us for their review meetings, our focus is not so much on investment returns (indeed, those returns may sometimes be negative). Instead, we focus on adding value to what we already deliver by discussing things like tax planning or how successful they have been in adhering to the roadmap – we may need to factor in the consequences of a personal crisis in their lives, such as a divorce or a bereavement, or a spouse losing their job. But fundamentally, our added value comes from the efforts to which we go to ensure that they continue to stick with the strategy in place for the longer term.
It is only by paying particularly close attention to our clients’ financial imperatives that we can forge a relationship based on communication and clear and impartial advice. After all, it is our clients’ own futures that they are seeking to protect.