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Working with peers on best-practice advisory standards

The global wealth advisory industry is booming. Armies of banks, insurance companies, (multi-) family offices and asset managers now compete for the attention of asset owners, offering an unprecedented number of investment consulting services with varying degrees of quality. Disappointing investment performance and unappropriate advice have led to a lack of trust in financial consultants during a phase where unbiased advice is most needed. In collaboration with the consultant network Advisornet (co-founded by onValues), we recently organised a public workshop to discuss and further develop best-practices for the financial and investment consulting profession. About 40 practitioners took part in the event and shared their experience in striving for excellence in their profession. Prof. Dr. Thorsten Hens of the University of Zürich presented the academic state-of-the-art in investment consulting and compared this with the current offerings available at Swiss banks. He concluded that science offers robust guidelines for advisory processes which are currently only partially adopted by banks. This was followed by a panel discussion with experienced practitioners focussing on frequently encountered dilemmas during the advisory process and how to deal with them. How can we cope with weak governance at a client’s family office or institution? How do we react if a client is not prepared to cover the full cost of quality advice? How do we deal with well-known behavioural biases of clients? These were among the many issues discussed at the event which will be further explored in the context of our Advisornet engagement.

Applying an impact lens to the entire portfolio

Ivo Knoepfel recently spoke at Pymwymic Impact Days*) about onValues’ experience in applying positive impact considerations to the entire wealth of clients, across all major asset classes. He stressed the importance of purpose and intentionality at different levels: at the level of single investments, of investment managers in charge of different parts of the portfolio, and when defining the strategy for the whole portfolio. In public markets, contributions to positive impact are often of a more systemic nature. Equity managers actively allocating capital to companies providing solutions to societal challenges and engaging with company management on these issues need to better report on the rationale and expected outcomes of their activities – Ivo Knoepfel stressed. He showed examples of asset managers and rating agencies that have developed frameworks to do so and reported on the experience of RS Group, a family office client of onValues, in applying an impact lens to their entire portfolio.
*) Pymwymic Impact Days is the leading European gathering of family investors and family offices engaged in the field of impact investing. This year it took place in Amsterdam on April 19 & 20.

Feeling the pulse of the German market

onValues recently conducted a systematic search and selection process for German banks and asset managers that offer investment strategies based on sustainability criteria. The outcomes show that the German market still lags behind other European markets in terms of the quality of the strategies and services offered, although we were able to identify 2-3 institutions that meet our quality standards. Assessment criteria included: institutions’ strategic commitment to responsible business practices, the role of sustainability within their asset management as well as the risk-return characteristics of their main investment offerings. The analysis lead to the following main observations: Most financial institutions market sustainable services but only few demonstrate strategic, top management commitment to sustainability investments. Environmental, social and governance (ESG) criteria are rarely integrated into the overall investment process and in most cases added as an extra filter during the security selection process. There seems to be a certain standardisation of processes for using ESG criteria during security selection driven by the consolidation trend in the sector for independent ESG-research. Performance differences within asset classes are small, but vary significantly for balanced strategies, leading to the conclusion that asset allocation is a key driver of performance.

Using scenario and contingency planning to prepare for the future

onValues has developed a set of long-term (20 years) and mid-term (3 years) scenarios as an input for developing investment strategies and contingency plans for clients. The long-term scenarios are used for strategy development and capacity building, the mid-term scenarios for implementing capital protection (and enhancement) strategies in the event of expected market dislocations. Whereas most investment advisors and asset managers focus only on economic data when defining investment strategies, onValues takes a broader view. Its long-term scenarios include assumptions on geo-political, economic, trade, innovation, demographic, social and environmental developments whose interaction then leads to certain outcomes at the level of the economy and of specific asset classes. The mid-term scenarios focus on turning points in market cycles that are triggered by economic realities and by the behaviour and perceptions of market participants. A system to monitor changes in market state that includes dimensions such as asset valuations, investor sentiment and internal market dynamics is used. onValues then works with clients to define measures aimed at protecting capital which is particularly important given the current risk of asset bubbles.

A different approach to financial market analysis

onValues has recently strengthened its macroeconomic and financial market research capabilities. The company now provides guidance on financial markets outlook based on a multi-dimensional analysis framework. Its approach aimed at better understanding mid- to long-term developments differs substantially from the short-term (3 to 6 months) focus of ‘market outlooks’ provided by banks and traditional advisors. This is in line with onValues’ focus on long-term orientated clients. Therefore onValues relies on the use of long-term data and valuation methodologies which have been proven to be robust over many investment cycles, i.e. decades. As an additional layer the framework monitors behavioral aspects of market participants thus capturing valuable information usually unrecognized in traditional financial market analysis. The onValues framework’s main goal is not to ‘time’ markets but to help clients identify ‘preventable surprises’ that can lead to substantial wealth destruction or unrealistic financial expectations.

Strengthening mission alignment of endowments at Swiss foundations

onValues has in the past months continued its work in support of the foundation sector in Switzerland. Besides providing advice to several foundations for developing and implementing mission aligned investment strategies, onValues is also engaged in sector wide capacity building efforts. Ivo Knoepfel is an independent advisor of SwissFoundations' (the national association's) working group on Finances which regularly deals with mission investing matters. In the Swiss Foundations Report 2015 (only available in German and French), Nathalie Moral from the Arcas Foundation and Ivo Knoepfel present results of their recent survey of Swiss foundations and a feasibility study for program related investments in Switzerland. Ivo Knoepfel was also a speaker at the Swiss Foundations Symposium held in Zürich on 3 June 2015.

Engaging leading families and their nextgens

onValues is active in several international networks supporting leading families invest their wealth according to their values and for positive impact. In April, together with one of our partners, we organised for the second time a workshop on sustainable investing for 'next generation' wealthholders from six different European countries.  On 20-21 April, Ivo Knoepfel was a speaker at the pymwymic Family Days. He briefed a group of 30 family principals and over 50 family office representatives on strategies to better align family wealth with sustainability drivers and impact goals. pymwymic is one of the leading family networks in the field.

Peter Wüthrich joins onValues

onValues is pleased to announce that, as of 1st of January 2015, Peter Wüthrich has joined onValues as a Senior Advisor and Member of the Management Board of the company.

onValues and Peter’s former company, Wüthrich, Henz & Co. Ltd., have been working together and sharing experiences in advising asset owners for a while now. Peter has also been a member of the advisory board of onValues. Over time, it became clear that the respective skills, networks and customer groups complement each other very well and that joining forces made sense.

Peter graduated with a Master's Degree in economics from the University of St. Gallen (HSG) and is a CFA- and FRM-Charterholder. With his long and successful track record in the Private Wealth Management industry, Peter is a seasoned investment specialist who will add value to our advisory services.

European foundation meeting marks growing interest in mission-aligned investing

onValues continues its work with European foundations in this area. After the Brussels and Zurich meetings, onValues recently helped organise and moderate a third European foundation roundtable dedicated to sharing best-practices in better aligning foundations' capital management to their mission. The roundtable was sponsored by the Foundation for Future Generations and Fondation de France and consisted in two meetings: one dedicated to overall investment strategies and governance issues (13-14 March 2014 in Brussels) and another one focussing more on venture philanthropy and impact investing approaches (3-4 July 2014, also in Brussels). 20 foundations from eight countries participated in the meetings.

Reports on the two meetings (including presentations) can be found at:
March report, and July report

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