Barclays Wealth is launching a new proprietary approach, called Investment Philosophy, combining client profiling and optimised portfolio construction.

Barclays Wealth is launching a new proprietary approach, called Investment Philosophy, combining client profiling and optimised portfolio construction.

In a release, Barclays Wealth says that “this new investment philosophy brings together expertise in client profiling, investment strategies and portfolio tailoring to create a new industry standard in private client service”.

The company says that the investment philosophy represents a step-change in defining and understanding clients' investment needs.

It starts with the premise that the client’s investment “journey” should be compatible with their financial personality, for instance, their level of composure and reaction to market losses, that should be taken into account in the asset allocation process.

The new approach then applies the clients’ profile to blending absolute and market return strategies.

A “Financial Personality Assessment” is then used to create a bespoke portfolio.

“This unique approach provides each client with a portfolio that closely matches his/her expectations and meets individual investment objectives. We are able to establish a much clearer picture of the client’s attitudes and proclivities through this objective process. Clients experience a greater sense of security and confidence, and are empowered to make better-informed decisions. Ultimately the client’s investment experience is transformed,” said Kevin Lecocq, chief investment officer, Barclays Wealth.

Barclays Wealth says that its new approach was developed by a dedicated team of leaders in personality profiling and investment behaviour, complemented by specialists in advanced financial engineering, portfolio management and investment research.

The bespoke investment portfolio which blends different investment styles to suit the client’s objectives and financial personality typically consists of a cash allocation, an optimised portfolio, which represents the central part of the client asset base, and a guided portfolio, which includes other investments selected on a case-by-case basis.

The optimised portfolio uses an open-architecture approach consisting of a blend of market return and absolute return sub-portfolios. Market return sub-portfolios are tailored to each client profile by blending globally diversified bond and equity instruments.

The market return component of the optimised portfolio consists of active, passive and static strategies. The active strategy is made up of third-party managers. The passive strategy is run by Barclays Wealth using a combination of total return index swaps and funded index vehicles. The static strategy is run by Barclays Wealth employing a market capitalisation approach.

The absolute return sub-portfolio is grouped according to strategy, as opposed to asset class. The stated aim is to deliver stable returns in excess of cash rates, but the specific skill or technique may vary widely between strategies.

The guided portfolio consists of bespoke investments such as private equity, structured products, and specialised third party funds.