Wealth management: What does it mean to Heartwood? 3
Heartwood's integrated wealth management services 4
Relationship management 5
Investment management 6
Additional services 7
Communicating with our clients 8
Client Centre 9
Our people 10
Image & Reputation
- High Net Worth
PAM Awards 2009
Heartwood Wealth Management (Heartwood) specialises in Our belief is that a boutique-sized company, where the
providing integrated financial, tax and investment advice leading people largely own and control the business, can
to investors. Our investment management capabilities can claim to be the most sustainable wealth management
be accessed on a stand-alone basis or in conjunction with business model. Independent ownership and close financial
retirement, inheritance and tax planning, enabling us to alignment help avoid the conflicts of interest which can
offer a truly holistic wealth management service. occur in broader organisations.
The company is over 20 years old and is independently We expect our senior staff personally to use Heartwood’s
owned by its management and staff. In a still-uncertain investment, pension and tax services, so that they share
environment for financial assets, we believe that it has the same experience as our clients, and to lead some client
never been more important to seek the counsel of an relationships. We expect them to invest some of their own
experienced wealth management firm. money in Heartwood’s equity, rather than just receive free
options. All these measures are designed to align client and
We manage and administer over £1 billion of funds on adviser interests, as we believe that this alignment is the
behalf of our clients, who include senior executives of UK best long-term guarantee of success on our clients' behalf.
companies, lawyers, financiers and entrepreneurs, as well This philosophy transmits itself through the culture of our
as many who have entrusted their retirement assets to us. people, rather than simply being the construct of well-
We are proud that a recent survey revealed that over 90% designed marketing campaigns.
of our clients would recommend us to their family and
Heartwood is by nature a modest organisation that
believes reputations have to be built steadily by consistent “ We are always very happy to recommend
Heartwood as our experience with your organisation
achievement and performance for clients. After 20 years of has been excellent. To be honest we are happy to
steady expansion in capability and size, we are determined be guided by you as you have a much better idea of
to continue building a fresh private wealth management what is likely to happen than we do.
(Current Client - January 2009)
company of enduringly high reputation.
Funds under management and administration
2003 - 2009 (year ending 30 April and year to date - 31/12/09)
2003 2004 2005 2006 2007 2008 2009 YTD
We believe that we have been able to bring many of We are organised by client segment, rather than by
the attributes of a true Family Office Service to wealthy product grouping. We set out to design relevant services
individuals, an unusual accomplishment in the UK, although for particular market segments, working back from generic
less uncommon in the US and mainland European markets. client requirements that we have been able to glean from
our contacts in the segment – for example, Directors
Our service combines investment, tax, trusts, pensions and Office® for FTSE directors; Partners Office for principals of
estate planning skills into a coherent whole. Overlaid by professional firms; Portfolio+ for those who are retired.
strategic advice and aggregated reporting, our service is
delivered by a relationship team led by a senior, experienced We provide clients with flexibility as to when and how we
individual. Our goal is to become the client’s genuinely communicate with each other – whether face-to-face, by
trusted adviser. email, telephone, letter or a combination. We recognise
that clients of the same age, in the same industry, with
assets of similar size and families of similar scale, will have
In te d differing levels of interest in their personal affairs and
the construction of their investment portfolio, while their
spouse or partner may be more or less involved in their
Our aim is that they should always see Heartwood, at every
touch point, as an excellent, honest, well-run organisation
n Pensions and retirement n Risk profiling offering a mixture of thought-leadership, modern systems
management n Strategic and tactical
n Inheritance and estate asset management and exemplary efficiency, allied to traditional values of
planning n Security selection personal service and trustworthiness.
n Tax compliance and n Portfolio construction
measurement We are pleased to have been able to attract new clients
n Client reporting
based on referrals from those we already serve. This is
underscored by our client satisfaction surveys, which
show that we are delivering against our promises and
h providing an excellent overall service. Our clients include
an many of the most discerning that can be encountered in
the wealth management market; they sometimes tell us
that they regard us as a well-guarded secret of the wealth
From the outset of our relationship, we gather information
on the broad spread of a potential client’s financial affairs
and can advise on the strategic and structural issues that
cross the different investment, tax and often pensions
disciplines. These can be issues of residence, domicile,
family, employer equity value crystallisation, retirement
management and estate planning. This is underpinned by
investment management to meet the client's strategic
objectives. Our investment offering is also taken by many
clients (either directly or via their advisers) on a stand-
Our clients are Our best advOcates
In the latest client satisfaction survey 92% would recommend us to friends and family*
*Source: Independent client satisfaction survey, July 2007
Heartwood's integrated wealth management services
We have a series of integrated wealth management services Partners Office
built around the needs of particular client segments. Partners Office
Fact Sheet - June 2008 Dedicated to the needs of
members of partnerships,
offering investment advice
Family Office integrated with tax and wider
A multi-family office offering financial advice.
Fact Sheet which includes strategic
financial, taxation, investment
and estate planning advisory www.heartwoodwealth.com
services across the range of the
family's assets, coupled with
Introduction Key Benefits
Each client is allocated a Relationship Director, who
Discretionary fund management
coupled with financial, taxation
Many financial advisers and wealth managers offer a mix of advisory
will be the main point of contact and who can draw
and investment services to clients with substantial invested assets.
on a team of in-house specialist advisers. Portfolio+
However, few of these businesses are able to provide, in-house, all includes:
three key components that are required for truly independent and n Discretionary investment management
integrated wealth management: This ensures that your capital is proactively and cost
effectively managed in line with agreed objectives.
n Investment Management It also gives you access to investments that may
and estate planning advice
n Tax planning and compliance ordinarily only be available to professional investors
and releases you from the day to day administration
n Financial Advice associated with a diverse portfolio of investments.
It is common therefore for at least one of these elements to be n The creation and maintenance of a long term
'outsourced' to a third party. ‘Financial Plan’
Portfolio+ aims to minimise the tax that is paid on
For FTSE and private company
Without these three elements in place, it is difficult to provide a your assets both during and after your lifetime. By
for those approaching or in
co-ordinated ‘family’ approach in order to address the issues that having a clear plan of action, revisited annually,
concern our clients, such as: you can aim to secure maximum tax savings and be
n I need, ideally, my income to grow in line with inflation each year. confident that your affairs remain structured in a way
that is most appropriate to your circumstances.
n I would like to mitigate my inheritance tax bill but am not ready n Strategic advice across your assets
Directors Office® to give away my capital. We understand that not all of your capital may be
directors offering investment
invested with us. However, this does not mean that
n I would like to help with the cost of my grandchildren’s education
Fact Sheet but am not sure how to do this tax efficiently.
external assets will be excluded from the advice that
we provide. Assets such as an investment or holiday
n I would like to ensure that I minimize the tax paid on my property, options and equity in a former employer and
investments. interests in trusts can all complicate your personal
tax position both from an income and inheritance tax
We believe that investment and tax advice for wealthy clients must point of view. Our advice can incorporate all of your
be co-ordinated. A strategy is needed to deliver an integrated
advice, taxation and financial/
approach to investment management, taxation, estate planning and
n Tax minimisation
other relevant issues. In addition we recognise that many of our We aim to ensure that the various assets that
clients do not need to take significant investment risks in order to comprise your portfolio are allocated most efficiently
achieve their financial objectives and that security of capital and between your ownership and any available tax
income is equally as important to them. 'wrappers', such as Pensions, Offshore Investment
Bonds and ISAs, in a way that seeks to minimise your
If you seek a consultative approach to the management of your
retirement planning services
financial affairs but neither want, nor have the time, to be involved
n Proactive Inheritance Tax management
in the day to day administration, Portfolio+ will meet your needs.
We will advise you each year on the options open to
Portfolio+ combines an advisory service, where key financial decisions you for reducing the amount of inheritance tax that
are discussed with you, and discretionary investment management. will ultimately be charged on your estate after your
We aim to be your single point of contact in respect of your financial death. Such strategies are based on a fundamental
affairs, recognising the importance that you place on retaining principal of getting the basics right – using available
to senior corporate executives,
ultimate control of your assets. allowances and exemptions and avoiding costly,
inflexible structures that would be open to challenge
by Her Majesty's Revenue and Customs (HMRC).
taking account of their financial
exposure to their sponsoring
company. These services have integrated pricing propositions,
integrated reporting (including the 'family balance sheet',
retirement and estate planning, custody locations, etc.
as well as investment) and agreed standards for client
meeting frequency and contact.
Sample family balance sheet
CLIENT BALANCE SHEET
Sample Family Balance Sheet
As at 28 February 2009
at 31 Dec 2009
Categories / Description CCY Client Partner Joint Held in Children Owner Last Mod. Notes
£ £ £ Trust £ £
ABC Flex A/c GBP 11,000 ZZD 02/02/09
Capital Current A/c GBP 10,000 ZZD 02/02/09
Premium Bonds GBP 30,000 ZZD 02/02/09
UK Bank Deposit a/c GBP 350,000 ZZD 02/02/09
Property & Chattels
Antiques GBP 50,000 ZZD 02/02/09
Main residence GBP 850,000 ZZD 31/07/08
Good Co plc GBP 11,360 ZZD 31/07/08 1,224 shs
HWM ISA A/c 123456 GBP 8,640 ZZD 02/02/09
HWM Main Disc A/c 123456 GBP 720,000 ZZD 02/02/09
HWM OIB A/c 123456 GBP 830,000 ZZD 02/02/09
Portfolio Outside HWM (Self Managed) GBP 720,000 ZZD 02/02/09
HWM SIPP A/c 123456 GBP 237,000 ZZD 02/02/09
Top Pensions SIPP GBP 153,000 ZZD 02/02/09
Dorset holiday cottage GBP 470,000 ZZD 31/07/08 Holiday rental
London flat GBP 450,000 ZZD 31/07/08 Rented unfurnished
We have made every effort to ensure the accuracy of this valuation. However where the assets are not under our direct control we have relied on the information supplied by yourself or third party custodians and financial institutions. Where it has proved
impossible for us to get fully accurate information in time for this valuation, we have used the most recent information provided by you or the last third party valuation provided to us.
For clients taking advantage of our integrated wealth
management services, the client relationship is led by a
relationship director, who:
strategic level advice to the client;
n represents the client internally within Heartwood; and
the teamwork of specialists involved in the
relationship, such as portfolio managers, tax advisers or
The frequency of meetings/client contact depends entirely
on the service selected and each individual client's
preferences. The service standard for face-to-face meetings
is quarterly for our Family Office service, six-monthly for
Directors Office® and annually for Portfolio+. Other
contact will include email and telephone, the frequency
depending on the degree of client interest and whether
the client is at a significant point such as a job change,
the crystallisation of a stake in a company or approaching
retirement. Beyond delivering our services to the expected
level, the best way to build trust is to have regular contact
and we always welcome this.
Our integrated services relationship director
The role of the
Inheritance Investment Strategy
Tax Your Trusts
Integrated service regular communication:
and advice: Delivered to:
To achieve a clear understanding
Each discipline consults with
of objectives and to ensure You and your interests
each other regularly to
appropriate and timely action to
achieve a coherent result for
you and your family
Investment management is a critical component of our We focus our efforts on the following areas:
integrated wealth management services. What our clients n researching and maintaining our long-term investment
seek to achieve from the performance of their investment strategies;
portfolios will in all probability evolve over time, but the n adding value by making sensible short-term asset
requirement for a robust process to determine investment allocation adjustments;
decisions remains a constant. n finding the best investment funds and products to meet
our investment needs (we do not research individual
We believe in the value of diversification and have seven equities);
investment strategies (see below). Depending upon their n bringing together each of the above to construct client
investment objectives and appetite for risk, each client portfolios;
is aligned with one of these strategies. The appropriate n understanding the inherent risks and returns associated
strategy for each client is determined during the course with client portfolios and any decisions we might take
of a number of meetings. There are model portfolios with regard to them; and
supporting each strategy and we encourage clients to n keeping clients informed of what we are doing and
allow us to follow the models as closely as possible. This how their portfolios are performing.
allows our investment professionals to spend the maximum
amount of time looking at markets and making investment The following factors are important:
decisions. When portfolios do deviate from the models, n using multiple asset classes and themes within well
it tends to be because of tax issues, sector exclusion or diversified portfolios;
ethical considerations. n having clear investment guidelines, processes and
The seven investment strategies provide robust solutions n ensuring that we can implement decisions in a timely
for client needs ranging from liquidity management to fashion;
aggressive growth mandates. They target appropriate n seeking out tax-efficient returns;
levels of return for associated levels of risk over a five-year n working as one team, as opposed to permitting a star
rolling period. The exception is the Endowment strategy, system; and
which invests on a ten-year time horizon and so has a n listening to our clients and benefiting from their
greater exposure to illiquid investments. insight regarding the economy.
Investment strategies' objectives Asset allocation
Liquidity Management Service (LMS): Generate performance (as at 31/12/09)
above cash taking low overall risk. 4.6% 3.1% 2.5% 3.0% 3.7%
Defensive: Achieve some of the returns generated by a diversified 21.6%
portfolio of securities but with the primary aim to preserve
Cautious: Achieve the returns of a diversified portfolio of 60.0%
securities with moderate downside risk. 8.4%
Balanced - Income: Achieve the higher expected returns consistent 14.2%
with a diversified equity biased portfolio whilst accepting greater 51.5% 6.4% 55.8% 56.2%
capital volatility, with an emphasis on generating income from 4.6%
the underlying investments. 19.2%
Balanced: Achieve the higher expected returns consistent with a LMS Defensive Cautious Balanced - Inc Balanced Growth Endowment
diversified equity biased portfolio whilst accepting greater capital
volatility. Equity Commodities Hedge Funds Property Bonds Cash
Growth: Achieve capital appreciation from a diversified equity Source: Heartwood
orientated portfolio with possible full participation in falls in the
Endowment: Achieve substantial appreciation over at least a ten
year time frame by investing in a diversified portfolio of risky
assets, being willing to accept bold asset allocation decisions and
being prepared to invest in illiquid and complex securities.
Integrated wealth management is our core activity, but the Retirement Planning
various components of this proposition can be delivered on For most people, the main aim of generating and then
a stand-alone basis. We find that, as we demonstrate our managing wealth is to prepare for their future financial
expertise and effectiveness in one discipline, we naturally security and that of their family.
acquire responsibility for other aspects of our clients'
affairs. The following services can be accessed separately At Heartwood, we see integrated retirement planning as
as individual advisory services in conjunction with a an essential component of a holistic wealth management
Heartwood managed investment portfolio: service.
Tax Office Heartwood can provide:
Our Tax Office service involves a true integration of tax n access to a dedicated in-house specialist pension and
compliance and tax planning in all of its dimensions (for retirement planning team;
individuals rather than businesses). We recognise that n advice on contribution levels to achieve target
many of our clients are unlikely to have time to devote to income;
managing their own tax affairs, so an important subsidiary n advice on structure optimisation and treatment of
objective for us is to minimise the burden for them while at existing arrangements;
the same time giving confidence that opportunities will not n advice on draw-down options pre and post 75;
be missed. n establishment of SIPPs;
n monitoring of headroom under Lifetime Allowance;
Tax Planning and Compliance and
n investment management across pension/non-pension
Heartwood can provide:
n advice on and implementation of tax-efficient portfolios – ‘holistic retirement planning’.
organisation of your affairs;
n tax compliance (preparation and submission of tax The Self Invested Personal Pension (SIPP) has now become
returns, appeals etc.); a commonly used pensions saving vehicle for affluent and
n tax-efficient investment structures and wrappers;
wealthy individuals. Heartwood offers two different types
n advice and arrangement of tax ideas or tax-advantaged
of SIPP service to meet two distinct market needs.
n advice and administration of trust arrangements; and
The Heartwood Integrated SIPP Service is likely to be
equity and options strategy and suited to Heartwood clients who have already managed
management. to accumulate substantial assets for investment within a
pension arrangement and who wish to have part (or all) of
their investments managed on a fully discretionary basis by
Heartwood's investment managers.
The Heartwood Simple SIPP is designed for investors who
Fact Sheet - September 2009
are either 'early accumulators' or are looking for a simple,
The wide spectrum of tax advisers makes it difficult to decide who to
appoint in this very important role. Online processing centres, local
Tax Office is an inclusive service comprising:
low-cost vehicle in which to build up their retirement
reserve. Via the Simple SIPP, investors can access a
accountants and multi-national accountancy practices all have their n An annual meeting with the Tax Client Manager
place in the market. It can however be hard to find an adviser with focussing on tax planning issues and opportunities
an exclusive focus on tax work for individuals, who has a detailed for the coming year. This can include consideration
of estate planning issues and equalisation of family
understanding of the increasingly complex issues faced by high
sophisticated pension product and investment process
earners and wealthy individuals.
n Production of a family tax reserve schedule to
These clients usually have significant tax issues and need pro-active
include all known future tax liabilities.
tax planning advice as well as a high level of tax compliance care.
They need to be secure in the knowledge that they have an adviser n Pro-active contact with you on ideas (or products)
designed to grow with them as their needs change.
who understands their needs and is available to deal with issues as which we believe are relevant to achieving overall
they arise. tax efficiency.
Tax Office involves a true integration of tax compliance and n Where appropriate, maintenance of a spreadsheet
tax planning in all of its dimensions (for individuals rather than providing pre and post tax values of employment-
businesses). We recognise that many of our clients are unlikely to have linked equity interests (outright shareholdings,
restricted shares and options etc), enabling tax-
time to devote to managing their own tax affairs, so an important
subsidiary objective for us is to minimise the burden for them while at
the same time giving them the confidence that opportunities will not In addition to:
Heartwood can also provide advice on a wide range of
n An experienced Tax Client Manager allocated to
The clients who may benefit
n Your tax return prepared and completed, using
Clients who have a high income and/or assets of substantial value,
leading tax IT systems.
and in particular clients who face an increased complexity in their
other pension scheme arrangments, including:
affairs at times of significant change in their personal circumstances. n Liaison with Her Majesty's Revenue and Customs
These 'lifecycle' events may give rise to issues such as school fees (HMRC) on your behalf.
funding, major property ownership changes, employer equity
diversification, or a substantive rearrangement of general affairs in n Correspondence with third parties for supporting
anticipation of retirement.
Typical clients include investment bankers, private equity fund n Agreement of your tax liabilities and confirmation
managers, partners in professional practices and senior executives in of when payments or refunds are due.
n Tax returns lodged in electronic format to ensure
n employer schemes;
they are filed accurately and on time.
Objective n Payment of taxes arranged directly with your
Our objective is to pro-actively identify opportunities which may portfolio manager or financial adviser, where
exist to reduce income tax, inheritance tax and capital gains tax appropriate.
n Small Self-Administered Schemes (SSAS); and
exposure, and to help ensure that assets are structured to minimise
n Offshore Pension Schemes (QROPS).
Communicating with our clients
A successful relationship depends on excellent New clients are also provided with written guidance to our
communication between us and our clients and having initial documentation package and then our first portfolio
a clear understanding of their objectives. Successful report's contents are either presented face-to-face or
relationships are nurtured by ensuring sufficiently regular explained in an accompanying letter
contact, in person or through other media; demonstrating
that we have delivered against agreed objectives; and
keeping current with clients' circumstances so as to adapt
our financial planning and investment management to
meet their changing requirements. As Heartwood sits
at the centre of clients' interests and requirements, our Investment View
interaction with clients tends to be regular and multi-
Regular communications include:
n portfolio valuations; HORIZONS
WInter/SprIng 2010 www.heartwoodwealth.com
n quarterly publication - Investment View;
n bi-annual publication - Horizons;
n regular bulletins on our investment positioning; and
n face-to-face review meetings which are offered to A life in the world of books
An interview with Frank Herrmann
all clients ranging from annually to quarterly (with Capturing the rally
The lower-risk way
minutes copied to the client, if required). An EPiC journey
Katie and Hallam Goad’s charity work
Must it end in tears?
Printing money through history
We communicate with clients via a mix of face-to-face A necessary evil?
meetings, telephone and email. We are in frequent contact Horizons Winter/Spring 2009 12
because of the broad mix of services provided, covering
tax, pensions, estate planning and family issues as well as
(including recent press releases)
This service is available to clients of Heartwood for whom we
manage investment portfolios. The service provides online
access to your investment portfolios and valuations.
Access is available 24 hours a day, 7 days a week and is
provided securely over the Heartwood website. There
are no extra charges for this service and all major web
browsers can be used to view Client Centre. Total security
is of paramount importance to us, so the service utilises an
encryption certificate (128 bit) to encrypt all data between
the client and the web server.
Client Centre provides a summary of the client's portfolios
with Heartwood, including Capital and Income accounts as
well as all transactions.
Client Centre - sample portfolio
Since creation, our core philosophy has centred on We believe that a key part of our success has come from the
treating our clients and our employees well. This has fact that members of our staff own most of Heartwood. We
been instrumental in creating a culture of openness and believe there is a dynamic correlation between ownership
teamwork, where all our employees (be they client-facing of the business and involvement in it.
or support staff) develop their skills and careers through
working together as a team. This culture has also been a
key factor in attracting top talent to the organisation.
Client-facing senior management
Simon Lough - Chief Executive
After graduating from Oxford University, Simon joined Kleinwort Benson in 1984 and moved to work for their Tokyo office in 1986.
In 1991 he joined BSI - Banca della Svizzerra Italiana, working as a First Vice President in their Tokyo and London offices. After
12 years in investment banking, he joined Cripps Harries Hall in 1996 to open the London office, becoming a Director of Cripps
Portfolio (now Heartwood) on its establishment in 2001. Simon became Chief Executive of Heartwood on 1 November 2008 having
previously headed both the client and investment teams. Simon is a member of the Board of the national charity Fairbridge.
Guy Hudson - Director, Head of Client Services
Guy has worked in the asset management industry since graduating from Oxford University in 1984. His career includes five years
as a private investment manager with Hill Samuel's Swiss subsidiary, Bank von Ernst, in Bern and 14 years with Newton and BNY
Mellon Asset Management. Most recently, Guy was responsible for International Distribution for BNY Mellon Asset Management,
also serving as Chief Distribution Officer for its JV West LB Mellon Asset Management. Guy joined Heartwood in March 2008 and is
responsible for all client-facing activities, intermediary relationships, distribution strategy, marketing and product development.
Noland Carter - Director, Chief Investment Officer
Noland started his investment career at Save & Prosper and Mercury Asset Management before moving to Ivory & Sime as head
of global equities. He crossed to private wealth management with his appointment as Barclays Private Banking’s Global CIO in
1997. Between 1999 and 2005 he established and was CEO of Barclays Investment Services and more recently he has been CEO of
Rothschild Private Management and Global CIO of Rothschild Private Banking and Trust. Noland joined Heartwood in May 2008
as Chief Investment Officer and leads our investment management division.
Gary Rogerson - Director, Client Services
After graduating in law from Oxford University, Gary qualified as a solicitor at Cripps Harries Hall in 1984 and was a Partner
between 1989 and 2002. He moved to join us as a Director in May 2002. Gary heads our team providing integrated investment,
financial and tax services to our wealthier clients via the Private Office suite of services and specialises in tax structuring.
Simon Dixon - Director, Client Services
Simon is a Chartered Tax Adviser and qualified Financial Planner. Prior to joining the organisation in 1998, he worked within the
Inland Revenue and as a tax specialist for a London firm of accountants. Simon heads a team within the Client Services division,
and specialises in providing tax and financial advice to high net worth clients with complex affairs, focusing on services for
directors, investment bankers and other high-earning individuals. He has particular expertise in employer incentive arrangements
and sophisticated Capital Gains Tax, Income Tax and Inheritance Tax planning.
Ian Cooper - Director, Client Services
After graduating in Economics from Sheffield University, Ian spent the early part of his career with a number of quoted companies.
In 1989 he set up and ran the investment management operation of Adams and Remers, Solicitors, which Heartwood acquired
in 2005. Ian’s main responsibilities are managing client relationships and the integrated investment management and advisory
services offered via the Portfolio+ service.
Hugh Tottenham - Director, Client Services
After graduating from Bristol University in 1984, Hugh spent three years in the British Army prior to entering the City. He worked
at Hill Samuel and in senior private banking roles at Morgan Grenfell/Deutsche Bank. In August 2008 Hugh joined Heartwood after
six years at GAM where he was a leading member of the highly regarded business development team, instrumental in building
relationships with private client advisors and fiduciary trustees, as well as marketing to the charities sector.