Revealed: Top 10 UK Advisers Using ETFs

November 26, 2015

James King

Vanguard S&P 500 UCITSIt seems that 2008—the year of the credit crunch—was a common year for planners to move to passive funds and ETFs, as they are transparent and low-cost vehicles. It was certainly a turning point for James King, partner and head of the private client department at Price Bailey. He started using ETFs in 2008 "to enable us to access investments markets around the world at a good price."

"We buy all our ETFs via our platform Praemium; it works pretty well, and we have been doing so since 2009," King added.

Price Bailey has partly gathered a healthy amount of assets under management through its own in-house and risk-rated model portfolios, which use a combination of ETFs, index funds and active funds.

King was keen to emphasise that the firm's investment philosophy is very much driven by asset allocation, as that is the major driver of returns, and is key when it comes to each client's needs.

"We choose funds—ETFs and active funds—based on cost and access to the areas we want to fit with our asset allocation criteria," he said.

The funds are picked by an investment research committee and are 'fairly simple' for clients to understand, like the FTSE 100.

"We explain that they are rules-based and that due to the construction and discipline of the index, the fund costs are far cheaper than for active managers," he said.

This decision has been part of why Price Bailey has not opted for arguably more complex strategies like commodities.

"We used commodities for a while but we never really got the results we wanted, particularly where we were using a broad basket of commodities including oil," he said. "Just because the spot price goes up doesn't mean the ETF does!"

As for the future, King envisages steady growth, looking after high net worth clients. His firm saw 8% growth last year alone.

When it comes to innovation in the European ETF industry, King called for the use of less jargon and complication.

"The people that speak on the subject sometimes make things more complicated than it needs to be," he said.

 

 

 

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