WealthSelect Q&A with Stuart Clark

First, please remind us, what is WealthSelect all about?

WealthSelect is an innovative, actively managed discretionary investment solution that allows advisers to choose a portfolio that best meets the investment needs and appetite for risk of their clients.

Since its launch in 2014 it has evolved to include passively managed portfolios, as well as a range of responsible and sustainable investment options. The portfolios are managed by me, Helen Bradshaw, and Bethan Dixon. We are supported by a range of dedicated teams across manager research, operational due diligence, responsible investment, risk, and implementation.

How are the portfolios managed?

Each portfolio has a defined volatility target. We manage each portfolio to always stay within this target. We are very aware of the efforts that financial advisers undertake to get to know their clients and understand their appetite for risk, so we need to ensure that we deliver investment portfolios in line with this. At the same time, we aim to maximise the return while also adhering to the dual objectives of the Responsible and Sustainable Portfolios.

The starting point for each portfolio is the strategic asset allocation. We then populate this with sub-advised mandates managed by our WealthSelect global partners or funds from the wider investment universe.

We rebalance the portfolios on a quarterly basis, but we also undertake ad hoc tactical rebalances at our discretion to take advantage of market opportunities.

So, how has WealthSelect changed since its launch in 2014?

In 2014, we launched WealthSelect to meet the evolving needs of advisers and their clients at that time. However, the world now bears little similarity to that of eleven years ago, so it has been vital for us to adapt and move with the times.

We started with a range of 16 actively managed and blended portfolios. This was expanded in 2022 to include another eight passively managed portfolios as well as a range of Responsible and Sustainable Portfolios.

Apart from the broadening of the range, one of the most significant changes has been the extension of the portfolio management team with Helen Bradshaw and Bethan Dixon joining in recent years. This has significantly increased our coverage and idea generation for the portfolios and should enable us to build further on the track record.

We have also evolved our approach to managing the portfolios, refining it to remain relevant in the current market environment. This has involved revisions to the strategic asset allocation model, the integration of new information and data into our portfolio analysis and, of course, learning from our mistakes.

During the last 11 years we have seen an incredible amount of change in the modern world. Political parties have been upended, wars have been started, and we cannot forget the impact of the coronavirus pandemic. All of this has impacted how we consider risks and opportunities within the portfolios.

How has WealthSelect performed for investors over the past 11 years?

The ‘original’ portfolios we launched in 2014 have performed incredibly well and have consistently outperformed their IA sector performance comparators. The theme of outperformance has also been replicated with the Managed Passive and Responsible Portfolios launched in 2022, with all ahead of their performance comparators.

Sustainable investing has faced significant challenges in the last few years with geopolitical headwinds leading to changes in political prioritisation. This has weighed on the performance of the Sustainable Portfolios. However, when measured against a peer group of similar portfolios they have performed comparatively well.

What has been your highlight since launching WealthSelect?

I am extremely grateful for, and humbled by, the trust that has been placed in us. While there are many more important jobs being undertaken every day, we want you and your clients to know that we remained 100% focused on managing the portfolios to the best of our abilities to repay that trust and help your clients achieve their financial objectives.

Asset management is a ferociously competitive environment and one which is not afraid to take the wind out of your sails if you become over-confident in your abilities.

Successfully managing WealthSelect through some seismic shifts in the macro-economic landscape in recent years has been an incredible challenge. However, it is one we have done while remaining firmly aware that we are only as good as our last set of decisions. To be taking on these challenges with colleagues that have such high capability and energy as Helen and Bethan means we can continue to treat future challenges as opportunities to deliver for you and your clients.