Academy is a Winner

Partridge Muir & Warren is a long-established and respected wealth management company in Surrey. We have Chartered status and have always placed emphasis on our professionalism and recognised the importance of qualifications in improving individual competence. But there is more to financial planning than qualifications – theory is all very well, but there is no substitute for practical experience in managing real money.

This was the thinking behind the PMW Academy. We wanted to enable trainee staff, who will hopefully take on advisory responsibilities in the future, to act as fund managers and learn from both their successes and failures before taking responsibility for clients’ portfolios. This is why the Academy’s portfolio has been financed by the company.

We aim to encourage staff to come through the ranks as they build up their qualifications and experience. Investing time and money in our staff is something we have always believed in strongly. We see the PMW Academy as a win-win situation – the individual members benefit through real rather than simulated experience and the company benefits by developing in-house expertise. I am sure that ultimately clients will benefit too.

The PMW Academy is, of course, in addition to the professional qualifications that all advisory staff take as a matter of course. Those learning the ropes invest real cash (but not clients’ money) across a range of asset classes. There are no restrictions as to what they can invest in – hedge funds, property funds, UK and international equity funds and bonds. Each member of the team is responsible for a particular sector and will argue the case at a monthly meeting for how much money should be allocated to them. Because it is a fund management team, and performance is a combined effort, the emphasis is on giving an accurate monthly appraisal, good or bad, on the sector each person is responsible for. All team members are expected to drill down into the funds in which they invest and understand what the investment style and objectives are and the risk levels of the portfolio.

If one of the team, for instance, is in charge of European equities but is bearish on the prospects for that area, they would be expected to argue to be allocated less money than their team members for the good of the overall fund.

“We wanted to enable trainee staff, who will hopefully take on advisory responsibilities in the future, to act as fund managers and learn from both their successes and failures”

At the end of each quarter the team reports to me on the investment decisions that have been implemented and the underlying rationale for them. Also, if the Academy’s management team beat their benchmark they share a bonus based on the profits they make for the company.

The Academy is an ongoing project, so as team members become more proficient and demonstrate a thorough understanding of portfolio management, they begin to advise real clients on asset allocation and are replaced in the Academy by new staff members who in turn develop their portfolio construction skills.

The portfolio objective is medium to long-term capital growth for a UK-domiciled investor with a balanced approach to risk. Investment volatility can be tolerated, provided it results in superior returns over time. At present, the team has decided to reduce exposure to fixed interest investments on the basis that rising inflation and the risk of partial default in the Euro zone will depress returns. Alternative investment strategies are being used as a replacement. Equity investment is diversified globally and it is good to see that the team has included exposure to higher growth economies. The chart above reveals the current position.

The Academy has been hugely popular with our team at PMW and from a client’s point of view it should be encouraging that those coming through the ranks are doing more than just sitting exams and learning theory but are actually learning to manage and make real money in the meantime.