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Written on 17th September 2015 by Ruth Meyer

When I Googled ‘How to choose a fund manager’, I had 6,060,000 results and quite clearly this is not an easy decision. So how should I choose?

I act as a Deputy for many clients. A Deputy is a person appointed by the Court of Protection to manage another’s finances when they have insufficient mental capacity to manage those finances themselves.

The authority to manage the finances stems from the Deputyship Order which usually contains a standard clause which says as follows:

“If the Deputy considers it is in X’s  best interest to do so, the Deputy may appoint an Investment Manager, who is regulated and authorised to undertake investment business, to manage their assets on a discretionary basis under the standard terms and conditions applicable to such service from time to time, and to permit the investments to be held in the name of the Investment Manager nominee company”.

In addition, the Court confers on the Deputy general authority for the Deputy to take possession or control of the property and affairs of their client and to exercise the same powers of management and investment as if they were the beneficial owner.  Therefore this gives a very wide scope and, alongside this, they also have the responsibility of ensuring that the investments are in the best interests of their client.

Many of my clients are children who have been injured at birth or brain injured adults who will rely very heavily on the income generated from their personal injury award for the rest of their life. I need to ensure that I am confident in my choice of financial advisor or fund manager and have done everything possible to ensure that their funds are safely invested and that I can maximise my clients’ return with the least possible risk.

With my years of experience I would say that the following are my top ten reasons for choosing a fund manager or financial advisor:

  1. They speak in plain English so that I and the client or the client’s family can understand them.
  2. They are suitably qualified.
  3. They have several years of experience.
  4. They have a real interest in what they do and if they enjoy it then it will show.
  5. They have a willingness to involve my Court of Protection clients who can and want to be involved in the decision-making process.
  6. They are efficient.
  7. They have a good back office so that when they go on holiday or I need funds transferred quickly then this can be carried out.
  8. They are proactive rather than reactive so that they will contact me immediately if they believe something could be done in my client’s favour rather than wait until an appointed time throughout the year.
  9. They have good communication skills and are able to report clearly in a format that can be understood by all.
  10. They have reasonable and competitive fees.

Finally, of course, I want somebody who is well qualified and has a proven track record of investing funds but ultimately I also need someone who can understand the vulnerability of my clients who have a personal injury award which is to last them for life.  I need to be cautious and do not want to take any unnecessary risks. A good fund manager or financial advisor will sit down and analyse the risk and monitor it carefully on a regular basis and communicate regularly.

I do not have a panel of advisors but simply consider the above points and then choose either one fund manager or a selection for the client to choose from and quite often the fund manager will fulfil all of the above and the final decision will then be swayed by a gut feeling and the personality best suited to my client.

In a recent case for a brain damaged child I picked a fund manager for the parents to consider. At first they were very wary – after all we were investing £1m of their child’s money. In addition their first language was not English. The fund manager was able to answer all of their questions and put their minds at rest and as we left the mother approached me and said “Ruth – he is exactly what we were looking for, thank you. It is as if he has been sent from heaven!”. Getting it right first time gives the client confidence and helps build the long standing relationship between client, Deputy and fund Manager.