Mike Deverell's firm adds to the relatively small number of independent financial advisers that not only advises on clients' assets but invests those assets into in-house multi-asset portfolios. After receiving its discretionary permissions in 2008 and learning its lessons from the financial crash of 2008, Deverell's firm realised that "joined-up thinking" was key to the company's success.
Focusing mostly on tax and pensions, the firm does not just use ETFs. In fact, it also uses actively managed mutual funds and passive index trackers, depending on the client's needs.
"Our philosophy on active and passive is we don't really mind; it's whichever fund fits the job," he said.
Deverell also swims against the tide by using passive funds for emerging markets—usually considered inefficient, where active managers can shine—but the adviser said he could not find evidence of consistent active outperformance. He moves away from so-called star active managers and takes time and effort to understand the team's approach, how they select stocks and whether they have a good track record.
ETFs have recently come in handy to trade volatility—buying in and selling out to gain profit when the VIX index spikes. Although he has traded successfully in the short term, he would not generally encourage investors to try this at home.
Equilibrium has also been traditionally fee-based, years before the RDR, and charges an annual fee of 1.5% for portfolios below £1 million, and 1% above that level. There are no hidden charges at Equilibrium—that number includes transaction charges, tax and financial planning and investment management.
When it comes to explaining process and fund selection to clients, Deverell doesn't shy away from the basics. One of his recent projects has been to ensure clients fully understand how the FTSE 100 index works—for example, the fact that it is concentrated in energy stocks.
"It's always important to understand how an index is composed," he said.