investec wealth & investment due diligence q&a

Investec Wealth & Investment Due Diligence Q&A

ContactName

Job Title

Investec Wealth & Investment

Address

Tel

Mobile

Email

3 Due Diligence Q&A

Contents1 Company Background

1.1 Company Information 4

1.2 Company Structure 4

1.3 Corporate Governance 5

1.4 Regulation & Insurance 5

1.5 Resourcing 6

1.6 Compensation of Personnel 8

2 Investment Services & Process 2.1 Investment Activities 9

2.2 Discretionary Client Relationships 9

2.3 Investment Philosophy 10

2.4 Investment Proposition 11

2.5 Investment Performance 12

2.6 Investment Process 16

2.7 Investment Tailoring 17

2.8 Investment Risk Management 19

2.9 Fund Investment 20

3 Client Administration 3.1 Custody 22

3.2 Fees & Charges 24

3.3 Client Reporting 24

3.4 Tax Considerations 25

3.5 Client Take-On & Departure Process 25

4 Compliance 4.1 Compliance 27

4.2 FCA Handbook 28

4.3 Bribery Act 2010 28

4.4 Treating Customers Fairly 29

4.5 Pre-Employment Screening 29

5 Systems & Service Providers5.1 Systems 30

5.2 Service Providers 30

Appendices 30

4 Due Diligence Q&A

1 COMPANY BACKGROUND

1.1 COMPANY INFORMATION

1.1.1 Name Investec Wealth & Investment Limited.

1.1.2 Address 30 Gresham Street, London, EC2V 7QN.

1.1.3 Website www.investecwin.co.uk

1.1.4 Contact(s) Name & Position John Cowmeadow, Head of Intermediary Services.

1.1.5 Telephone/Email/FaxTel: 020 7597 1704Email: [email protected] Fax: 020 7597 1000

1.1.6 Registered No. 2122340.

1.1.7 Legal Entity Identifier (LEI) 213800RJBFS4M7AV8W97.

1.1.8Credit rating and rating body (if applicable).

N/A.

1.1.9 MiFID II Status IFPRU (limited access)

1.2 COMPANY STRUCTURE

1.2.1

How would you characterise your company (e.g. Private Bank, Investment Manager, Investment Bank)?

Investment Manager.

1.2.2Please provide a brief history of the company, and if applicable, the group.

Investec Wealth & Investment (IW&I) has a foundation that goes back to 1827 and our history is closely linked to the development of the financial sector in the UK. The bringing together of illustrious names including Rensburg Sheppards and Williams de Broë, combined with the strength of the Investec group, has allowed IW&I to consolidate its wide-ranging expertise and leading position. The depth and breadth of Investec enables us to offer a broad service to our clients and access to an extensive pool of investment opportunities around the world. Meanwhile our commitment to providing out of the ordinary levels of personal service for our clients and their advisers remains paramount. Investec plc is an international specialist bank and asset manager that provides a diverse range of financial products and services to a select client base, principally in the United Kingdom, Guernsey (CI), South Africa and Australia.

1.2.3

What is the legal structure of your company? Please provide details of the company’s current ownership structure, and any details of recent or planned changes. Include a structure chart if applicable.

The Investec Group is a FTSE 250 company and is listed on both the London and Johannesburg stock exchanges. IW&I is a wholly-owned subsidiary of Investec and forms a key part of the Wealth & Investment business unit. We remain an autonomous unit within the organisation.

1.2.4

Please indicate the percentage of company and group revenue derived from investment management.

100% of company revenue is derived from investment management and related business, circa 10% of the Group’s operating profit.

1.2.5

Please give details of any changes to the firm or its group during the past 12 months (i.e. mergers/acquisitions, disposals and alliances) including changes in progress or due in the next 12 months.

There are no material changes to the IW&I business. On 13 March 2020, the Investec group successfully completed the demerger of its asset management business (Investec Asset Management), which became separately listed as Ninety One on 16 March 2020. However, there will be no change to the ownership, organisation and structure of IW&I in the UK as a result and most importantly, there will be no change to the services we provide all our clients.

5 Due Diligence Q&A

1.3 CORPORATE GOVERNANCE

1.3.1Who are the Directors? Please provide details of their effective roles.

Steve Elliott – Chairman Ciaran Whelan – Chief Executive Iain Hooley – Finance Director Jane Warren – Executive Director Judy Price – Executive Director Tomas Street – Executive Director Mike Rigby – Executive DirectorLouise Hall – Executive Director Murray Mackay – Executive DirectorAndrew Rydon – Executive Director Robert Lister – Non-Executive Director (Independent)Dr Tim May – Non-Executive Director (Independent)Cath Thorpe – Non-Executive Director (Independent)Elizabeth Catchpole – Non-Executive Director (Independent)

1.3.2How often does the Board of Directors meet?

The Executive Directors hold an executive management meeting monthly, whilst the entire Board meet quarterly.

1.3.3Are there any Independent Directors?

As set out above under Non-Executive Directors.

1.3.4 Company Secretary Steven Kilday

1.4 REGULATION & INSURANCE

1.4.1Indicate the jurisdictions in which the company is regulated for investment business.

United Kingdom / Guernsey / Switzerland / South Africa. We can passport our activities into various EEA states.

1.4.2Please provide dates and nature of the last FCA visit.

IW&I’s relationship is managed by the FCA and as such we are in continuous contact with our FCA relationship manager.

1.4.3

Please confirm that you continue to have the required FCA permitted activities to enable you to act in the capacity of Investment Manager.

Yes, FCA number 124537.

1.4.4

Please give details of any disciplinary action pending or instigated during the past 12 months (including fines) taken by the FCA (or its predecessors) or any other regulatory body (please include any areas of the risk mitigation programme relevant to the activities carried out as a discretionary fund manager in respect of:a) The Firmb) The Firm’s directors, partners

or senior managersc) Employees or agents of the

Firm.

None.

1.4.5

Provide details of the number of client complaints received in the last three years, and the number that remain outstanding after 12 months.

Our Complaints Policy and Procedures comply with FCA regulations. There are no issues, of which we believe, you should be made aware of.

6 Due Diligence Q&A

1.4.6

Would an investor be covered by any guarantee and/or compensation scheme with regards to investments held? To what maximum amount?

The actual level of compensation you receive will depend on the basis of your claim. For example, the FSCS only pays compensation for financial loss. Compensation limits are per person per firm, and per claim category (listed below).The maximum levels of compensation are:Deposits (Client Money): £85,000 per person per authorised bank or building society for claims against firms declared in default on or after 30th January 2017. £170,000 for joint accounts. Any cash balances held within an IW&I portfolio at an authorised bank will count towards your overall FSCS limit. Investments (Client Assets): £85,000 per person per firm for claims against firms declared in default from 1st April 2019.Further information can be found at the FSCS website at https://www.fscs.org.uk

1.4.7What Professional Indemnity insurance is held?

Insurance is maintained against Investec’s possible negligence of up to £200m in any one claim and in all.

1.4.8

Have you assured yourselves and your regulatory body(s) that your insurance cover is appropriate & suitable?

Yes.

1.4.9

FATCA – will you be a Foreign Financial Institution (FFI) or a Participating FFI? Who checks investors/beneficial owners for US connection?

We are a UK Financial Institution. Our Operations department checks.

1.4.10

Following the implementation of the Retail Distribution Review (RDR) in the UK, will you be classified as independent or restricted?

Restricted.

1.5 RESOURCING

1.5.1 Number of permanent staff. IW&I employs approximately 1,400 permanent staff.

1.5.2Number of investment professionals.

Approximately 470 investment professionals, all of whom are directly involved in private client investment management. Our Research Team includes research specialists under the stewardship of our Chief Investment Officer. We are supported by management, marketing and control functions, a full in-house settlements department and a significant IT division that allows us to continually enhance our systems.

1.5.3

Number of investment professionals directly involved in discretionary investment management.

In addition to the above, many of the individuals within the investment teams are fully qualified.

1.5.4

Please provide staff turnover metrics for the discretionary investment team for each of the last three years, and explain any significant employee turnover.

Although no firm can guarantee continuity, we believe it is good business practice to attract and retain high calibre, quality staff. We often attract new clients from competitor firms who have suffered from frequent changes in their Investment Manager. Stability of the team allows us to understand our clients fully and to develop a proper relationship with them. We have an average tenure of 13 years and whilst we do not have specific details for the turnover rate for Investment Managers, for the firm as a whole the rate is low by industry standards (<5%).

7 Due Diligence Q&A

1.5.5Explain any succession planning or other Key Man risk defence.

Central to our philosophy is our belief in the continuity of personnel which we have achieved by generating and maintaining an atmosphere of trust and respect. Our collegiate style allows all staff to be empowered with a sense of common purpose. We operate in a team-based approach and should we lose a ‘Key Man’, we have a sufficient number of capable people available to ensure that the level of service to our clients and their advisers would be maintained and our business unaffected.

1.5.6

Please give details of key discretionary investment personnel, including years of investment experience.

As a result of the number of investment professionals (1.5.2.) within IW&I it is not possible to detail the level of experience for each individual. However, the average is in excess of ten years. An example of the experience held is within the Research Team, there are 12 CFA holders and, separately, two Associates of the Society of Investment Professionals.

Name Role Investment Experience (Years)

Abhay Gohel Senior Structured Products Analyst 13

Adrian Todd Fund Selection Specialist 13

Andrew Shard Senior Equity Analyst 31

Andrew Summers Head of Collectives 23

Chris Hills Chief Investment Officer 45

Darren Ruane Head of Fixed Interest 23

Dominic Barnes Portfolio Manager 33

Eddy Hargreaves Senior Equity Analyst 25

Esther Gilbert Fixed Income Analyst 13

Guy Ellison Head of UK Equities 19

Jimmy Muchechetere Equity Analyst 9

John Haynes Head of Research 33

John Wyn-Evans Head of Investment Strategy 35

Lottie Mitchell Research Assistant 3

Marcus Blyth Fund Selection Specialist 12

Nicola Mills Research Assistant 1

Peter Tasou Head of Structured Products 16

Saul Larthe Research Assistant 4

Shilen Shah Bond Strategist 16

Simon Lapthorne Senior Equity Analyst 34

Stacey Parrinder-Johnson

Fund Selection Specialist 14

Tom Mann Head of International Equities 22

Zane Bezuidenhout Equity Analyst 14

8 Due Diligence Q&A

1.5.7Please include an organisational chart.

Chief Executive Of�cerCiaran Whelan

Managing Director

Tom Street

Private Of�ceMichael Winson

Regional DirectorLondon

Louise Hall

Regional Director

Southern RegionAlex

Charalambous

Regional Director

Scotland &Northern IrelandMurray Mackay

Regional Director

Midlands and the NorthCarl Cross

Intermediary Services

JohnCowmeadow

Head of InternationalCatherine Kirchmann

Dealing Crispin Goody

Of�ce HeadsLondon

Of�ce Heads Bournemouth,

Bristol, Cheltenham,

ExeterGuilfordReigate

Of�ce HeadsBelfast,

Edinburgh, Glasgow

Of�ce HeadsBirmingham

Leeds, Liverpool,

Manchester, Shef�eld

Of�ce HeadsChannel Islands

Managing DirectorTom Street

Chief Executive Of�cerCiaran Whelan

Business TransformationJane Warren

Compliance& Risk

Mike Rigby

Financial Control

Iain Hooley

Human Resources

Simon McBride

Information Technology

Andrew Rydon

Operations Judy Price

Investment RiskMark Bulsing

Research & CIOJohn Haynes

Chris Hills

MarketingIain Clark

1.6 COMPENSATION OF PERSONNEL

1.6.1Please explain your employee compensation/bonus scheme.

Salaries with bonuses linked to performance criteria. All bonuses are paid on a discretionary basis.

1.6.2

How are the objectives of key discretionary investment personnel aligned with those of the investor?

We align our Investment Managers remuneration and the activities of the firm to the successful management of each client portfolio. The majority of our revenue is derived from ‘ad valorem’ fees. Pre the RDR we sought Institutional rather than Retail share classes where collectives were held and we have ensured full transparency throughout. The more consistent the performance achieved for our clients the greater our reward; conversely it is in our interests as well as the clients to mitigate risk and protection of capital.

9 Due Diligence Q&A

2 INVESTMENT SERVICES & PROCESS

2.1 INVESTMENT ACTIVITIES

2.1.1Total Assets Under Management (AUM).

We have circa £32.8 billion AUM, as at end March 2020.

2.1.2Percentage growth of AUM over each of the last 5 years.

We have a mature business, established over many decades, which typically grows at 3-5% per annum on an organic basis. In the short-term, our AUM is influenced by market movements.

Date AUM

31/03/2020 £33bn

31/03/2019 £36bn

31/03/2018 £34bn

31/03/2017 £33bn

31/03/2016 £28bn

2.1.3Split of assets by investor group (private, charity, institutional, fund).

Private Client 66%Pensions 9%Intermediary 16%Charities 9%

2.1.4

Split of private client assets by revenue stream (discretionary investment management, advisory, execution only).

In terms of asset split by revenue we make the distinction between non-managed and managed accounts, split 16% and 84%.

2.1.5Split of private client discretionary assets by currency (GBP, USD, EUR, CHF, Other).

US Dollars 1.17%Euro 0.19%Sterling 98.49%Other 0.15%

2.2 DISCRETIONARY CLIENT RELATIONSHIPS

2.2.1

Who is the clients’ primary point of contact; the Investment Manager, a dedicated relationship manager or another contact?

Each client is appointed a dedicated Investment Manager and his/her team as and when appropriate. We typically operate within teams of Investment Managers, with a lead manager and experienced back-up for each client and adviser relationship.

2.2.2

Which jurisdictions do your Investment Managers operate from? Do you have relationship managers in additional locations?

We have Investment Managers in all 15 office locations: Belfast, Birmingham, Bournemouth, Bristol, Cheltenham, Edinburgh, Exeter, Glasgow, Guildford, Leeds, Liverpool, London, Manchester, Reigate and Sheffield.

2.2.3

Typically how many discretionary private client relationships will each Investment Manager/point of contact be responsible for?

We do not impose set maximums on the number of client relationships that each Investment Manager can have responsibility for, as the breadth of the client and/or family relationship, complexity and size of our internal team all influence capacity. Each Investment Manager works within a team ensuring that there is sufficient resource to meet each client’s specific needs.

2.2.4How many discretionary private client relationships does the company manage in total?

37,500 Discretionary Clients (based on main accounts/ISAs joined together and counted as one).

2.2.5What is the average discretionary client size?

The average is £522,093 funds under management based on linked accounts (as per the above re Main/ISAs, joined together).

10 Due Diligence Q&A

2.2.6What is the smallest discretionary client size considered?

Our minimum value for segregated bespoke portfolios is £150,000 and there is a minimum fee of £1,200 plus VAT. There is no minimum to access our MPS on Platforms service.

2.2.7

What percentage of AUM is accounted for by the five largest clients? Please indicate the client types (private, charity, institutional, fund).

As a well-established business with a broad range of clients our five largest clients account only for 2% of our overall AUM.

2.3 INVESTMENT PHILOSOPHY

2.3.1Describe your investment philosophy.

We believe a structured and disciplined investment process is central to delivering consistent risk-adjusted returns to our clients. Our independent researchers and experienced investment managers are organised into specialist teams to focus on three core areas: asset allocation, stock and sector allocation and collective funds. Our committees meet regularly to review markets and ensure they remain relevant. Additionally, IW&I have a Global Investment Strategy Committee, which is comprised of global members of Investec’s Wealth and Investment division. The committee co-ordinates our risk tolerance, discusses how we should spend our risk budget, identifies and validates investment themes, highlights threats and discusses new developments with potential impact upon asset market returns. Our guiding principle is that markets are far from perfect and that a research based approach will reveal the imperfections and provide the best overall results in the long term. Indeed increasing levels of volatility suggest that markets are becoming less efficient in the short and medium term. This approach allows us to exploit such opportunities for our clients’ advantage through a policy of active rather than passive management, albeit we are investors not traders. Our investment philosophy is not slavish to any single ‘style’ such as growth, value or momentum. Different styles will be used at different points of the economic cycle.

2.3.2How has this philosophy evolved over the last three years?

Over many years we have found that a disciplined approach to investment incorporating all of these (sometimes conflicting) factors, coupled with a flexibility to embrace change, has given us a performance track record of which we are extremely proud. Because of the diversity and complexity of markets, no individual manager can hope to keep abreast of the wealth of information available. This is why we adopt a collegiate approach which enables our clients to benefit from our combined experience and contributes significantly to our exceptionally low level of staff turnover.

2.3.3In what ways do you believe your characteristics differentiate you from peers?

Genuinely bespoke portfolios rather than imposed models with direct access to a dedicated Investment Manager who works closely with the client/s and their trusted adviser all supported by a robust investment process and pre-eminent Research capability.


2.4 INVESTMENT PROPOSITION

2.4.1

In the table opposite, please indicate which of the mandates you feel you can deliver against (by way of a ✰), and also which areas you believe to be your particular strength (by way of a ↔).

Cautious BalancedSteady Growth

Equity Risk

Cash +

GBP ↔ ↔ ↔ ↔

USD ✰ ✰ ✰ ✰

EUR ✰ ✰ ✰ ✰

CHF ✰ ✰ ✰ ✰

Other

We operate within a risk adjusted framework and when initially constructing bespoke portfolios there are five levels of portfolio risk and three investment options creating a matrix of 15 templates from which a client may initially choose. These are then tailored to each client’s unique circumstances and needs. In addition we can offer fully defined mandates. Further detail is contained in our Managing Your Investments document (IWI476).

2.4.2

Please indicate where you offer a pooled vehicle by giving the name of the vehicle and the minimum investment required.

We do not offer pooled investment via in-house funds.

2.4.3

Can clients access your discretionary solution via a Wrap Platform? If so, please list the platforms used (e.g. Novia Financial, AXA Elevate, Fidelity FundsNetwork, etc.).

We’ve developed a range of investment strategies designed to match your clients’ investment objectives and attitudes to risk. The strategies are now available on more third party Platforms than ever before (Embark, Hubwise, Nucleus, Standard Life and Transact) and are actively managed by our dedicated investment team. Our segregated DFM services are only available via our platform.

2.4.4Detail any tax/insurance wrappers that can invest in your discretionary solution(s).

Clients can hold portfolios within most pension wrappers and bond products (onshore and offshore).


2.5 INVESTMENT PERFORMANCE

2.5.1

Please provide performance figures for your key discretionary offerings (indicated with a ↔ in the table above) or pooled investment vehicles, including comparisons with the relevant benchmarks for each of the last 3 years.

Steady GrowthDiscrete Annual Total Return Performance

IW&I Steady Growth PCI ARC Steady Growth PCI Average20.0%

15.0%

10.0%

5.0%

0.0%

-5.0%

-10.0%

-15.0%

-20.0%2020

to date2015 2016 2017 2018 2019

IW&I Steady Growth Index (%)

ARC Steady Growth PCI (%)

2015 1.9 2.3

2016 12.3 11.6

2017 9.9 9.4

2018 -5.5 -5.6

2019 15.5 15.0

2020 to date -15.5 -14.5

Drawdowns and Recovery Periods on a Rolling 5-Year Basis

0.0%

-2.0%

-4.0%

-6.0%

-8.0%

-10.0%

-12.0%

-14.0%

-16.0%

IW&I Steady Growth PCI ARC Steady Growth PCI Average

Mar 2015 Mar 2016 Mar 2017 Mar 2018 Mar 2019 Mar 2020

Annualised Volatilities 3 years (%) 5 years (%)

IW&I Steady Growth PCI 9.4 8.5

ARC Steady Growth PCI Average 8.9 8.1

Volatility Compared To PCI 0.5 0.4

ARC PCI Median Volatility 9.0 8.2

Figures as at 31.03.2020

Past performance should not be taken as an indication or guarantee of future performance.


2.5.1


BalancedDiscrete Annual Total Return Performance

IW&I Balanced PCI ARC Balanced PCI Average15.0%

10.0%

5.0%

0.0%

-5.0%

-10.0%

-15.0%2020

to date2015 2016 2017 2018 2019

IW&I Balanced Index (%) ARC Balanced PCI (%)

2015 1.5 1.9

2016 9.8 8.6

2017 7.5 6.7

2018 -4.4 -5.1

2019 12.7 11.7

2020 to date -12.0 -11.0

Drawdowns and Recovery Periods on a Rolling 5-Year BasisIW&I Balanced PCI ARC Balanced PCI Average

0.0%

-2.0%

-4.0%

-6.0%

-8.0%

-10.0%

-12.0%

-14.0%



IW&I Balanced PCI 7.3 6.6

ARC Balanced PCI Average 6.7 6.2






2.5.1


CautiousDiscrete Annual Total Return Performance

IW&I Cautious PCI ARC Cautious PCI Average10.0%

5.0%

0.0%

-5.0%

-10.0%2020

to date2015 2016 2017 2018 2019

IW&I Cautious Index (%) ARC Cautious PCI (%)

2015 1.0 1.3

2016 7.2 5.5

2017 5.0 4.5

2018 -2.8 -3.6

2019 9.1 8.1

2020 to date -6.7 -6.5


0.0%

-1.0%

-2.0%

-3.0%

-4.0%

-5.0%

-6.0%

-7.0%


IW&I Cautious PCI ARC Cautious PCI Average


IW&I Cautious PCI 4.4 4.0

ARC Cautious PCI Average 4.2 3.8






2.5.1


Equity RiskDiscrete Annual Total Return Performance

IW&I Equity Risk PCI ARC Equity Risk PCI Average20.0%

10.0%

0.0%

-10.0%

-20.0%

-30.0%2020

to date2017 20182015 2016 2019

IW&I Equity Risk Index (%) ARC Equity Risk PCI (%)

2015 2.3 2.1

2016 13.9 13.7

2017 11.5 11.4

2018 -5.8 -6.5

2019 17.7 18.0

2020 to date -18.2 -17.3



IW&I Equity Risk PCI ARC Equity Risk PCI Average

0.0%

-5.0%

-10.0%

-15.0%

-20.0%


IW&I Equity Risk PCI 10.9 9.9

ARC Equity Risk PCI Average 10.8 9.8




We currently submit performance in excess of 22,400 portfolios (at Family Level) and are one of the largest contributors of data to the indices. There are currently around 80 contributing investment management firms. The data used to calculate the performance figures consists of all of our discretionary managed clients with a portfolio value greater than £200,000 and where all stocks are managed within the portfolio by IW&I. Both the ARC PCI and the IW&I PCI are calculated on a simple average basis. Classification of portfolios is carried out by ARC using historic risk relative to the risk of global equities. ARC’s risk categories may not match the risk and return objectives of all underlying portfolios. All data is net of fees. Average performance data will not necessarily reflect the returns achieved by individual portfolios. Investors should remember that the value of investments, and the income from them, can go down as well as up and that past performance is no guarantee of future returns. You may not recover what you invest.


2.5.2

Please compile a list of any major industry awards your firm has received in connection to any services of relevance to this assessment questionnaire, in the past three years.

• Winner of Defaqto Gold Discretionary Fund Manager Service award (2017-2020)

• Winner of Defaqto 5-Star awards for DFM Bespoke (2013-2020), DFM MPS Direct (2017-2020) and DFM MPS on Platform (2020)

• Winner of City Of London Wealth Manager Award – for Wealth Manager of the Year 2015

2.6 INVESTMENT PROCESS

2.6.1Describe your investment process.

In order to ensure that Investment Managers have a consistent amount of common information flow, we have a company-wide investment process, which addresses the following tasks: 1. Asset Allocation 2. Sector and stock weights in equity portfolios 3. Preferred investment selection for other asset classes or types: Fixed Interest Collectives Commercial Property Alternatives

Cash4. Tactical flexibility5. CommunicationThe investment process needs to harness the best ideas of the firm’s resources, in pursuit of the objective of delivering consistently good risk-adjusted returns for our clients. We adopt a collegiate approach taking the best ideas from our Research Team and Investment Managers. This includes specialists in collective funds, bonds, macro-strategists and former institutional fund managers. We have access to wide networks of personal contacts in the City, as well as access to a full range of sell-side written research and a broking service from selected brokers. Please also refer to our Managing Your Investments document (IWI476).

2.6.2

Are there any asset classes/strategies that you would not consider investing in, or particularly favour?

We avoid opaque structures, illiquid investments and highly leveraged situations. Whilst we would consider almost all investable asset classes, this does not mean that we would recommend investing in a particular asset class for our clients.

2.6.3

Please provide a model asset allocation for your ‘Balanced’ offering (i.e. risk approx. 50% of volatility of world equities).

We firmly believe in offering a bespoke, tailored portfolio for each client rather than imposing “model” portfolios. We strongly believe that each client should be looked after by their dedicated Investment Manager, not a relationship or marketing person. Our investment managers develop close working relationships with advisers and their clients to ensure that we fully understand the requirements of each and establish long term relationships. Whilst we adopt a flexible, bespoke approach, our tactical asset allocation for a medium risk balanced portfolio would be:

Asset Class Benchmark

Fixed Interest 20.0%

Equities 61.0%

Commercial Property 4.5%

Alternative Investments 10.0%

Cash 4.5%

100.0%


2.6.4On what basis and when might your model strategic asset allocation change?

Our Strategic Asset Allocation is formerly reviewed annually but material changes are rare, driven only by changes in the long-term outlook for the component asset classes. It will be unaffected by normal short-term market fluctuations.Our Asset Allocation Committee meets every month and on an ad-hoc basis as is appropriate. They analyse the performance of the five asset classes, how we might expect them to perform in the future in “normal” economic conditions together with their potential volatility. As we rarely experience what could be described as “normal” economic conditions, a key part of our process is to establish our preferred asset allocation to best reflect, at any one moment in time, the prevailing and anticipated economic, interest rate and currency forecasts and the outlook for fixed income and equity markets. This we refer to as Tactical Asset Allocation which is established, reviewed and revised by our Asset Allocation Committee. The committee is comprised of representatives from both our Investment Manager practitioners and our in-house Research Team. This tactical position can be set either side of the strategic position, but within additional boundaries which we have defined, to give us the flexibility to manage investments to reflect all likely market conditions. This creates an asset allocation range for each asset class with a minimum and a maximum exposure. Please again refer to our Managing Your Investments document (IWI476).

2.6.5

How does an investment become a ‘buy’, and then how does an investment become a ‘sell’?

The buy and sell discipline revolves around our ongoing security selection criteria and meetings with company and fund managers. At a macro level, our asset allocation views may dictate whether we wish to be in a particular asset class or country. Each situation is reviewed on its own merits with an overlay of common sense and we do not rely on machines to tell us when a stock should be bought, held or sold. In addition, due to the bespoke nature of our service, trading within a client portfolio is dependent on the particular circumstances of the client, taking into consideration things like attitude to risk and timeframe for investment.

2.7 INVESTMENT TAILORING

2.7.1

Do you provide client risk profiling, and if so by what method? How often is this risk profile revisited?

For clients that come to us directly we use the FinaMetrica questionnaire based profiling system to establish the clients risk appetite. This is then combined with capacity for loss measures to select the most appropriate risk profile. We do not map directly from FinaMetrica to portfolio structure. Such a process may well provide the client with an inappropriate result, and of course will fail if a client refuses to complete the questionnaire. Further, we are all too aware that their client questionnaire is out of date and can lead to incomplete and therefore ‘inaccurate’ survey results.We have evaluated other risk profiling tools and retain an open mind on whether they may replace FinaMetrica.This is only a “snapshot” in time and the clients risk profile needs to be revisited by the client’s Adviser at regular intervals and on an ad-hoc basis as determined by any events which may occur in the client’s lives resulting in a need to re-evaluate their objectives. An open dialogue with the Adviser and/or their client is maintained at all times.


2.7.2

Describe how portfolio construction works for a specific client. Can the investor be involved in this process?

Portfolio construction is a key part of our investment practice and follows our top down approach. Asset allocation is fundamental to ensuring an appropriate structure to the client’s portfolio and we will consider all asset classes: Fixed Interest Equities Commercial Property Alternative Investments CashThe client’s dedicated Investment Manager will ensure that the tactical asset allocation adopted on a day-to-day basis reflects the agreed strategic asset allocation and prevailing market conditions.We are very aware that most clients are more sensitive to losses on initial capital than reductions in capital gains built up over the years, as a result we would normally adopt a conservative stance with new client portfolios. This is particularly relevant with cash investments where the timing of a new client’s investment will have to reflect their wishes and investment opportunities.Our clients are encouraged to be involved in the investment process and we understand that we may be managing only a part of an investor’s overall wealth. We can accommodate specific preferences and we are used to tailoring portfolios to adjust, include greater weightings or exclude asset classes where appropriate.

2.7.3

How much discretion does an individual Investment Manager have over the construction and operation of a client’s portfolio vis-à-vis in-house models etc.?

In accordance with our investment process the Investment Manager has a degree of tolerance within which they can operate. Each month our Asset Allocation Committee reviews and sets the tactical asset allocation for different scenarios and the Investment Manager then has the flexibility within a pre-determined range of +/-10% to apply a more personalised approach (please refer to the Managing Your Investments document). Whilst we do not wish to become dependent on quantitative tools such as “black boxes” for measuring portfolio risk, we have a number of internal checks including a centrally run monitoring committee and an automated alerts process. The monitoring committee reviews all portfolios on a rolling basis to check that they are being invested in accordance with the underlying client’s mandate and also that the composition of the investments reflects our house view. In addition, it considers areas such as overall asset allocation, portfolio concentration and performance in the context of each client’s risk parameters and ranges. The alerts function is an automated process that reviews all portfolios on an ongoing basis and then raises alerts with the Investment Manager. This highlights any move away from the agreed mandate and will address any subtle drift over a period of time. Alerts cover: Asset Allocation against the agreed mandate Quality of the stocks selected Diversification of assets held Concentration of investment The Investment Manager then has to either action each alert or they can defer a decision for a short period of time.


2.8 INVESTMENT RISK MANAGEMENT

2.8.1Please give details of your investment risk management policy.

Please see 2.7.1.

2.8.2

How do you incorporate investment restrictions (ethical constraints, credit risk limits, min/max. exposures etc) into your day-to-day management of portfolios?

All investment restrictions are recorded on our portfolio management system and are clearly visible to Investment Managers when implementing investment decisions.

2.8.3Describe how you monitor and control counterparty risk.

In terms of market counterparty exposure for dealing, a counterparty panel exists within IW&I to approve any new market counterparties and to monitor the current list used by the company in the execution of client orders. The Panel includes the Head of Dealing, the Chief Investment Officer, representatives from Senior Investment Managers and a representative of the Cash & Credit Management Committee.When reviewing both potential and existing investments our Research Team bears in mind exposure to a particular counterparty across the firm, whether that be equity, debt or guarantor. For structured products the Research process starts with counterparty risk and only product from risk approved providers is allowed to get onto the recommended lists.

2.8.4

Has any product/fund/holding in your discretionary client portfolios been written down to zero in the last three years? If so, please give details.

Patisserie Valerie (Patisserie Holdings) was part of our AIM portfolios. No researched asset has been written down to zero for our mainstream accounts over the last three years. Clients are allowed to hold non-discretionary assets in their discretionary portfolios. These are embargoed and in effect are execution only holdings within the discretionary account. Some of these may have lost 100% of their value.

2.8.5Please explain your currency hedging policy. Does this apply equally to all asset classes?

Our “default” strategy is to hedge Overseas Fixed Interest back into Sterling. This is universally achieved via holding a Sterling hedged asset class (fund or ETF). We have no ability to hedge directly using futures or options. Occasionally a hedged /unhedged view is taken of Yen assets.Our general philosophy is that we have no proven ability to forecast FX. We therefore prefer to run portfolios with low currency risks, but we accept that currency hedging direct equity holdings is a complex proposition that is unlikely to be successful. Therefore currency risk emanating from equity exposure is best considered to be part of the overall risk of holding the asset. Our risk model allows us to estimate the fraction of portfolio risk due to FX, and to stress test portfolios against currency moves.

2.8.6Do you ever use derivatives for non-hedging purposes?

Discretionary portfolios are managed without the use of direct derivatives either for hedging or speculative purposes. However, we may invest in structured products or alternative investments where the investment return is based on an underlying derivative strategy.


2.9 FUND INVESTMENT

2.9.1Do you use internal/external funds in your discretionary investment portfolios?

We passionately believe in the benefits of active management for most asset classes. Successful active management provides an opportunity to improve risk-adjusted returns through: (a) outperformance of a benchmark, (b) diversification benefits from combining different investment approaches and idiosyncratic stock selection risk and (c) exposure to asset classes and strategies that are simply not available or suitable in a passive form. We believe that successful active management, as defined by better net risk-adjusted returns, is driven by persistent manager skill.However, we also recognise that identifying in advance persistent manager skill sufficient to generate better net risk-adjusted returns requires time, resources and experience. Such skill is not normally easily identifiable, and certainly not by past performance, which is not a guide to the future. It requires a deep understanding of the relative strengths and weaknesses of an investment proposition to determine. We believe that our six strong fund research team plus the combined experience of our investment managers gives us the scale of resources and depth of experience necessary to undertake the level of both initial and on-going due diligence that is required for successful active fund manager selection.


2.9.2

Please describe the company’s due diligence process when considering investment in a particular fund solution.

We have developed a proprietary APPROVED fund assessment framework to guide our fund selection and on-going monitoring process. This framework is based upon academic and empirical evidence as well as logic and our experience. In each instance we believe these pillars determine a fund’s ability and likelihood of delivering its investment objective. Our approach is qualitative in focus as the evidence warns us against picking funds based on quantitative measures that are rarely predictive of future performance. We are fortunate to have a competitive advantage in terms of resources, time and access to managers to truly understand their investment offering, with the principal mechanism being frequent face-to-face meetings with fund managers. Our APPROVE framework is designed to exploit that competitive advantage for the benefit of our clients.

Assets manageable

Scale of assets managed must be compatible with investment objective

Inappropriate scale of assets is a key driver of underperformance

Philosophy resonantes

Intuitively appealing and able to deliver our required investment outcome

Investment team must articulate and demonstrate efficacy of philosophy

Process disciplined

Philosophy rigorously implemented with a consistent approach

Disciplined application of process to minimise risk of style drift

Risk managed Investment process embeds appropriate risk management.

Risk taken must be consistently commensurate with the returns delivered

Organisationally sound

All relevant aspects of the organisation and infrastructure must be sound

Investment excellence is best sustained by round organisational excellence

Value for money All costs are reasonable given value of investment objective

A large portion of active managers lose outperformance due to excessive costs

ESG approach A robust, dispassionate and suitable integrated ESG approach in evidence

Appropriate ESG approach will maximise risk-adjusted returns

Demonstrable talent

Investment team should demonstrate peer-leading investment skill

This is the first pre-requisite of achieving an investment objective

Fund additions and removals are subject to the scrutiny of the Collectives Research team with input from the CIO and Head of Research as well as investment managers.

2.9.3

What liquidity profiles do you require; are “gates”, lock-ups, exit restrictions tolerated? Please give details.

We invest only in listed investment companies or daily traded UCITS vehicles.

2.9.4What level of transparency do you require from such funds?

We have as much transparency as we require for our assessment but the usefulness thereof will vary by fund or strategy. We regularly seek substantial, detailed information well beyond that available to investors who do not specifically ask for it. Where necessary, we will sign Non Disclosure Agreements to access information necessary to inform our analysis and on-going monitoring.

2.9.5

Is there an approved list of funds? If so, how many funds are on it and do discretionary managers have the ability to invest in other, non-approved funds?

We maintain coverage of c300 collective investment vehicles. Our first choice in each sub sector is blue flagged; our second choices in a sub sector are green flagged as are funds that may be more niche. Together these constitute c180 flagged names which form the basis of our recommendations for portfolios and where we undertake the vast majority of our on-going due diligence and monitoring. However, we also maintain lighter coverage on a further c120 funds that we deem appropriate to own in specific circumstances and where owning blue or green flagged names are not appropriate or possible.


3 CLIENT ADMINISTRATION

3.1 CUSTODY

3.1.1

Please confirm the full legal title & address of your nominated custodian bank, & where appropriate, the ultimate parent holding company of the custodian.

Rensburg Client Nominees Limited, incorporated in England under number 02020824; Ferlim Nominees Limited, incorporated in England under number 01022478; Spring Nominees Limited, incorporated in England under number 01747036; Hero Nominees Limited, under number 34543 or such other nominee company as we may lawfully establish from time to time. For overseas securities, these will be lodged with an authorised depository in the name of ‘our nominee company’, or the company if required. Our nominee companies are wholly-owned subsidiaries for whom we accept responsibility for safe custody obligations. Holdings may be in certificated or other physical form or held in a dematerialised form within the CREST settlement system on a pooled basis.

3.1.2

Can the nominated custodian provide custody for all instruments and investment types?

Where it is not possible to use our own nominee company and safe custody services (for example with non-UK securities), our client’s investments may be registered, recorded or held in a trust account on their behalf in the name of one or more eligible custodians or their nominees. However, such investments will not be held with any third party in another country which does not regulate the safekeeping of financial instruments unless the nature of the financial instrument requires it or where a professional client requests us to do so in writing. Such investments will be held on a pooled basis, but may be held on a designated basis if dictated by overseas jurisdictions. Please refer to our Terms and Conditions (IWI040).

3.1.3Can the client nominate a specific custodian?

We can accommodate alternative custodians where necessary.

3.1.4What is your approach to protecting clients’ money and assets?

As an FCA regulated firm, we follow the rules prescribed by the FCA in choosing where stock or cash will be deposited for safe keeping or custody. In relation to cash balances, the FCA Client Money rules require us to deposit Client Money in a client account with a bank or other credit institution of a type permitted under the rules.

3.1.5How are individual client assets held?

IW&I wholly owns four Nominee Companies, Ferlim Nominees Limited, Rensburg Client Nominees Limited, Spring Nominees Limited and Hero Nominees Limited, all of which are used to hold Client Assets in accordance with the Client Assets rules of the FCA. A Nominee Company holds assets as the legal owner, but on behalf of clients as beneficial owners of the associated Client Assets.IW&I does not hold any of its own assets in our Nominee Companies, they exist purely to hold Client Assets.Assets of clients held in our Nominee Company are recorded in such a manner to clearly indicate that they do not belong to IW&I. Therefore, in the unlikely event of the insolvency of IW&I, a liquidator would be legally prevented from using clients’ assets to settle the firm’s liabilities.Our Nominee Companies operate as pooled nominees, meaning all of our clients who hold their assets in our Nominee Companies have a claim against the relevant pooled nominee holdings in the event of any insolvency event.Pooling your investments with those of other investors means that your individual entitlement may not be identifiable by separate certificates, physical documents or entries on the register.In the event of insolvency or other such default event, as your holding is pooled with other clients, this means that you will have a general claim on the assets alongside other clients, which in the event of any shortfall, may result in a proportionate distribution of such assets to you that are less than your recorded holding.


3.1.6How is individual Client Money held?

Client Money is held with a bank or approved credit institution as permitted by the FCA Rules, in an account which is designated as Client Money and covered by an FCA Acknowledgement Letter. The letter sets out the legal terms that apply to the protection and segregation of those funds and clearly differentiates it from our own firm’s money. In the unlikely event of an IW&I insolvency, this means the money in these accounts would be held separate to our own firm’s money and be available to the insolvency practitioner to distribute to the respective clients with a valid claim on the balance.If you have elected for an offshore portfolio, your Client Money is held in a bank account in an offshore location, but forms part of our overall general pool of Client Money.For any type of portfolio, because we operate a general Client Money pool, it means that any claim by you is against the Client Money pool in general, which means that the balance on all of our Client Money Bank Accounts will be divided proportionately to all clients who have a valid claim against the sum held in the general pool and this may or may not be equal to the individual sum you hold in your client portfolio.We place Client Money with a number of banks and this helps us to optimise the service and also diversify to reduce the exposure of holding Client Money with a single bank.We manage our deposits with strict banking limits in place, to cover any single bank or group of banks operating with a single banking licence. We would normally have a minimum of 8-10 banks with whom we are placing money, of which we have exposure limits. In the main individual banks have a limit of 25%, with groups a maximum limit of 35%, however, we do not normally reach these limits.This may not entirely eliminate any risk of loss to you in the event of a default situation, but we feel it is a beneficial control to assist in mitigation of the risk.

3.1.7

Do you maintain separate records to the custodian & how often are custodian statements reconciled to client statements?

We review all stock movements on a daily basis and immediately investigate and resolve any anomalies. In addition we undertake a complete reconciliation monthly.

3.1.8

How are exceptions from the reconciliation process investigated and cleared? Typically, what is the current length of time an item will be remain unreconciled for?

See above.

3.1.9

Please describe the procedures & controls in place to prevent the nominated custodian from engaging in unauthorised lending of client stock.

We have rigorous monitoring and controls to prevent such events.

3.1.10What processes are in place to monitor and minimise counterparty risk?

We have sufficient controls and monitoring to minimise the counterparty risk.

3.1.11Which legal entity will physically hold client cash?

Client Money is held in trust within a bank or approved credit institution as permitted by the FCA Rules in an account which is designated as Client Money and covered by an FCA Acknowledgment Letter.

3.1.12Do you have the capability of offering “gross nominee” arrangements?

No.


3.2 FEES & CHARGES

3.2.1Please provide your discretionary investment management fee scale.

We apply a ‘Fee Only’ charge. Transparency is paramount and we ensure that the client knows exactly the cost of all elements of our service and any remuneration we facilitate to their adviser on their behalf.

• On the first £1,000,000 1.00% plus VAT• On next £1,500,000 0.75% plus VAT• Thereafter 0.60% plus VAT• Bargain Administration Charge is £25• Minimum Charge Discretionary is £1,200 plus VAT

Any adviser agreed remuneration is in addition to IW&I charges.

3.2.2Please provide details of other fees/charges not included in the figures above.

Please refer to our Rate Card (IWI029) for details of any incidental costs.

3.2.3How are cash balances and in-house funds treated when calculating fees?

Cash is an integral part of our active asset allocation process and is included for fee calculation. The cash held is pending investment within the portfolio and therefore clients should maintain their cash reserves, “rainy day” funds elsewhere.

3.2.4

Do you receive retrocessions from third party managers, and if so how do you account to the client for this revenue?

Prior to the RDR our policy was to invest in institutional unit/share classes that do not pay trail commissions rather than institutional share classes. Post the RDR we seek to invest in “clean” share classes.

3.2.5Can you provide an estimated illustration of costs for your typical ‘Balanced’ client?

As we do not impose model portfolios we do not have typical portfolios or clients. We will provide all potential clients with full details of indicative costs prior to appointing IW&I as their discretionary manager.

3.2.6

Please give details of your fee calculation process (valuation basis, calculation frequency, vehicles with lagged pricing, etc.).

Our charges are calculated on the value of the portfolio on a pro-rata basis quarterly in arrears on the last day of February, May, August and November.

3.2.7

How are fees / charges claimed (and reimbursed)? Are fees charged to client accounts, or invoiced then settled?

Most charges are debited directly from the client’s account/s but we can accommodate invoicing when required.

3.2.8Do/can you levy performance fees? Please give details.

No.

3.2.9

Do you offer a facility to use a client portfolio as collateral in a lending arrangement? Give details of fees/charges.

No.

3.3 CLIENT REPORTING

3.3.1How often are portfolio valuations typically sent out to the client?

Quarterly.

3.3.2Can historic valuations be generated for any given date?

All client valuations from 28th June 2018 are stored within Investec Online but ad-hoc valuations can be requested and specific timeframes chosen.

3.3.3Do you provide clients with online valuation facilities?

Yes our Investec Online Service is available 24/7 for both clients and their advisers. Advisers can use a secure login to view all of their client portfolios and their agency statements. Holdings are priced on real time (with a short delay of 15-20 minutes). Clients can access their Capital Account statements and can self select their valuation and statement time periods. Additionally there is the ability to drill down into each holding to see all transactions and associated costs.


3.3.4

Are you GIPS (Global Investment Performance Standards) compliant (or similar)? Are your discretionary portfolio performance statistics externally reviewed?

The methodology used for the calculation of individual client portfolios is consistent with GIPS. However, due to the wide variety of client requirements, we have decided that the sheer number of different ‘GIPS buckets’ required would make GIPS compliance across all portfolios a meaningless exercise.

3.3.5On what basis are securities valued?

Mid-Price.

3.3.6

Please give details of your security pricing policies & sources (including direct securities, open & closed ended collectives, foreign exchange rates, etc.).

Securities will be valued at the close of business on the valuation date. If the valuation date falls on a non-Business Day, prices quoted will be those as at the close of business on the last Business Day before the valuation date. UK quoted securities are valued at the mid-market price quoted on the London Stock Exchange. Overseas securities are valued at the midmarket price or last traded price available to us on the relevant Stock Exchange. Unit Trusts are valued at the middle of the prices prevailing on the valuation date. We use the Interactive Data Corp every night for prices from all exchanges and fund managers.

3.3.7Detail the process for accounting for self-certified and stale prices.

Where illiquid stocks are held our Dealers establish an indicative market price daily.

3.4 TAX CONSIDERATIONS

3.4.1Do you provide clients with tax advice and / or tax solutions?

Not as part of our Discretionary Management services but we do have an in-house Financial Planning capability where a client does not already have a trusted adviser. Our Financial Planning team are focused on direct private clients only and all clients of Advisers are ring-fenced and protected.We do not provide tax advice although many of our Investment Managers have a working knowledge of tax issues as far as they effect the investment management of client portfolios. We are always happy to work with the investor’s tax advisers to create the most appropriate solution.

3.4.2Do you provide UK tax reporting?

We provide a full UK annual report containing all the information that a UK taxpayer will require to complete their tax return in respect of their investments under our management. Although this pack is designed from a UK tax perspective it can be produced at any month end and for many non UK residents.

3.4.3Do you provide US / other tax reporting?

No.

3.4.4Do you offer a Tax Reclamation service?

No.

3.5 CLIENT TAKE-ON & DEPARTURE PROCESS

3.5.1Describe the client take-on process.

Each client will be allocated a dedicated Investment Manager who will meet with them (and their adviser) to ensure that we understand their requirements and to then explain our service, features, functions, benefits and costs. If the client decided that they would like to proceed we ensure that they have all of the necessary information on which they can base their decision. We provide each client with a Portfolio Suitability Report which sets out our understanding of their situation and confirms how their portfolio is to be managed to the client’s specific requirements and all costs.

3.5.2Can a new client transfer their existing portfolio in specie?

Yes, we will obtain the necessary authority/ies to transfer from an existing Investment Manager or own name and process the transfer into the clients portfolio.


3.5.3Detail the new client due diligence process.

We broadly obtain new clients from two sources, direct or through an intermediary. In the first instance the Investment Manager will meet with the client to establish their circumstances and complete all the necessary regulatory aspects (KYC, Suitability etc.). Where an introduction is received from a professional financial adviser (FCA regulated) we will expect them to accept responsibility for “suitability”. We will typically meet with the client and their adviser to ensure that we understand our obligations to construct a portfolio that is appropriate to their agreed mandate. Please refer to our Managing Your Investments document (IWI476).

3.5.4Describe client/portfolio exit procedures.

In the event that a client decides to exit the service we will facilitate the sale and/or transfer into their own name or to an alternative Investment Manager. Charges will be calculated up to the date of closure and reporting provided to that date (CGT, Tax etc.).


4 COMPLIANCE

4.1 COMPLIANCE

4.1.1Please describe your Compliance Procedures and Resources.

The Compliance and Risk department comprises of four separate teams: IM Compliance (UK)IM Compliance (International)Operational RiskFinancial Crime

Routine monitoring and themed reviews are undertaken within the four teams and procedures are documented.

4.1.2

What policies/procedures are in place to ensure sufficient compliance, monitoring and control with regulatory issues?

We have appropriate policies and procedures in place in order to ensure compliance with our regulatory obligations.

4.1.3Is there a separate dedicated compliance team?

Yes, our Risk and Compliance Department is responsible for reviewing policy, providing advice and monitoring the business.

4.1.4

What do you consider to be the key compliance issues facing discretionary Investment Managers?

The pace of regulatory change.

4.1.5Have there been any compliance issues anywhere within your organisation in the last 3 years?

No.

4.1.6

To what extent is there an independent check (i.e. outside the nominated portfolio manager(s) and client contact) in relation to client and in-house guidelines?

We have a proprietary “alert” system which identify various aspects of client portfolios, these outliers are followed up by our IW&I ‘Suitability Team’. In addition the Compliance Department undertakes various routine monitoring checks and themed reviews to ensure compliance with regulations and in-house guidelines.

4.1.7

Who is responsible for monitoring and controlling compliance of the funds in which the Investment Manager invests?

Investment Managers are responsible, in the first instance, for ensuring the suitability of investments for clients. Our internal monitoring routines ensure this is complied with.

4.1.8How do you protect your data or client data from risk of theft or destruction?

These aspects are addressed by our:Data and Record Retention PolicyInformation Security PolicyClear Desk Policy

4.1.9Do you have a Business Continuity & Disaster Recovery Programme?

Yes.

4.1.10

What process do you use to copy/back up your information? How frequently are backup’s taken?

Back up’s are undertaken every evening.


4.2 FCA HANDBOOK

4.2.1

Please confirm that you have implemented appropriate processes and procedures in order to comply with COBS and specifically COBS 9 (Suitability) and 11 (Dealing and Managing).

Yes.

4.2.2

Please confirm that all appropriate information / notifications required by COBS is provided to clients.

Yes.

4.2.3Please confirm in whose name assets have been registered.

Rensburg Nominees (Please refer to section 3).

4.2.4

Please confirm that your Client Money Account(s) have trust status as required in the CASS rules.

Yes.

4.2.5Have you had any material CASS breaches in the past 12 months? If so, please provide details?

No.

4.2.6

Have you had to notify the FCA of any CASS breaches in the past 12 months? If so, please provide details.

No.

4.2.7How do you disclose your conflicts of interest?

Conflicts of Interest Policy is contained within our Terms and Conditions (IWI040) and a Conflicts Log is maintained within the Firm.

4.2.8

What is your policy on soft commission arrangements? Do you have any soft commission arrangements?

Soft Commission arrangements are not permissable.

4.3 BRIBERY ACT 2010

4.3.1

What systems and controls do you have in place to ensure compliance with the Bribery Act 2010? Please provide a copy of your Anti-Corruption Policy.

We have policies in relation to:Avoidance of Bribery and CorruptionWhistle BlowingGifts and Hospitality

4.3.2Can you provide copies of these policies?

We cannot provide a copy of our Internal Policies as it is proprietary material, but the Policies are available to view at any of our offices.

4.3.3

What training relating to anti-bribery or corruption do you have in place for your staff, including management?

Computer Based Training (for new employees and every two years for all employees) and face to face training every two years (for all employees).

4.3.4

How do you ensure that your agents, business partners and other third parties with whom you contract comply with anti-corruption legislation?

We do not have agents, business partners or other third parties with whom we contract.

4.3.5Who is your contact for Bribery Act compliance?

Richard Traub (MLRO).


4.3.6

Have you, or any of your directors, officers or employees had any previous convictions, fines or other sanctions imposed by a court, regulator or authority for corruption (including fraud, money laundering and/or bribery)?

Not to our knowledge.

4.4 TREATING CUSTOMERS FAIRLY

4.4.1

What systems and controls do you have in place to ensure the requirement to treat customers fairly is embedded in your culture?

These are incorporated within our Conduct Risk Framework, Conduct Risk Policy and Conduct Risk Committee.

4.4.2

How will you satisfy yourselves that the appropriate behaviours and actions are happening in practice?

Through regular monitoring of Investment Managers activities and Management Information from the business.

4.5 PRE-EMPLOYMENT SCREENING

4.5.1

Please confirm you undertake appropriate employee screening so as to confirm and verify the identify of employees including their address and employment history.

• DBS checks are undertaken on all new employees.• An external reference firm is used to validate qualifications

and employment history• AML identification is required for all new employees.


5 SYSTEMS & SERVICE PROVIDERS

5.1 SYSTEMS

5.1.1

What investment management systems do you use? When were they installed? Are there any recent or planned upgrades?

Our main portfolio management system is Pulse which has been part developed internally. Pulse is a browser based portfolio management system that takes holding data from our client settlement and custody system (FISCAL) and provides Investment Managers with portfolio modeling and analytics as well as links to our research intranet and order management systems. Pulse was installed in 2000 and functionality is constantly being added.

5.1.2Once a decision to buy or sell is made, how are trades executed?

All trades are handled by our order management system (OMS) which routes orders to our trading desks where they are either executed manually or electronically.

5.1.3Is there an internal dealing function?

Yes, all orders are handled by our dealing desk. As members of the London Stock Exchange we deal direct in UK equities, Gilts and Corporate Bonds and pass orders to third party brokers on other exchanges globally.

5.1.4

If in-house or affiliated brokers are used, what percentage of transactions are placed through them?

We act as agent in respect of client transactions and do not take principal positions.

5.2 SERVICE PROVIDERS

5.2.1

Please provide a list of • Legal Advisers • Auditors • Bankers/Custodians • Administrators (if applicable)

Squire Patton Boggs KPMG HSBC In-house

5.2.2Please provide details of any other key outsourced service providers.

As you would anticipate we manage numerous portfolios within wrappers (SIPPs, Bonds etc) and we can provide full details if required.

APPENDICES

• Managing Your Investments for Clients of Financial Advisers (IWI476)• Rate Card (IWI029)• Financial Adviser Client Set-Up Procedures (IWI351)• Brochure/s o Financial Advisers (IWI020) o Clients of Financial Advisers (IWI236)

IW&I has maintained a Defaqto 5 star rating for our DFM Bespoke service since 2013 and for our DFM MPS Direct service since 2017. IW&I has also maintained a Gold rating for it’s DFM Service for the third year running.

Member firm of the London Stock Exchange.Authorised and regulated by the Financial Conduct Authority.Investec Wealth & Investment Limited is registered in England. Registered No. 2122340. Registered Office: 30 Gresham Street, London, EC2V 7QN.

IWI1012 v20 06/20

Belfast 02890 321002

Birmingham 0121 232 0700

Bournemouth 01202 208100

Bristol 01225 444860

Cheltenham 01242 514756

Edinburgh 0131 226 5000

Exeter 01392 204404

Glasgow 0141 333 9323

Guildford 01483 304707

Leeds 0113 245 4488

Liverpool 0151 227 2030

London 020 7597 1234

Manchester 0161 832 6868

Reigate 01737 224223

Sheffield 0114 275 5100

All data correct as of March 2020 unless otherwise stated

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