Money Matters

The next decade could well belong to the nice guys.

I visited the London & Capital office yesterday, half-expecting to be ushered into some daunting and overly  decorated corridor filled with isolated rooms, and occupied by very serious wealth managers.

Instead I was greeted by a large, bright and open space that resembled a bit like the FT office. There was no air of exclusion, as everyone on the L&C team sat in the same area, including the founders.

It’s a different strategy no doubt, but L&C’s entrepreneurial spirit has given it a competitive edge. At a time when investors are shifting towards a more DIY culture, L&C has maintained its clientele base by following a few simple rules:

Here’s a good one: Never talk about products and or use polysyllabic, technical jargon with clients in the first meeting!

After a decade of bankers and wealth managers hard-selling products (many destroyed the credibility of their trade), it’s unsurprising that investor sentiment is changing.

But do they want more than just performance?

If you look at the performance of stock markets over the past decade, the tech and subprime bubbles look like the spitting image of a roller coaster ride.

Although investors recovered quickly from the dramatic dip in 2002, many are still holding their breaths as they ride the market rally into 2010.

Alan Brown, chief investment officer of Schroders Investment Management says to expect more bumps in the middle of the next decade, when inflation is set to kick in.

His solution: Don’t act like a deer in the headlights.

He says that’s the response many institutional managers took during the crisis, opting to do nothing when they should have changed their asset allocation in accordance with current market conditions.

So on Brown’s advice, what should your portfolio look like?