WHAT MAKES US DIFFERENT?
FRANZSEN & VAN REENEN represents a departure from the norm in the following respects:
Fixed annual fee based on your needs and complexity of the investment strategy
Instead of charging a percentage of assets under management, we charge a fixed annual rand amount depending on each client’s service needs and the complexity of his/her investment implementation. This is in contrast with the industry norm where a fixed percentage of assets under management is charged and where the annual rand amount continues to increase as the portfolio grows.
You will only deal with skilled, experienced Advisory Partners
We have no employees dealing with clients. Clients are only ever advised by a FRANZSEN & VAN REENEN Advisory Partner. These partners are all skilled, experienced professionals and are all equal shareholders in the business. There is no B-team.
Personalised engagement is guaranteed
Because the main purpose of the business is not profit and growth, the number of clients per advisor will always be very low (between 4 and a maximum of 15 clients per partner). The opposite of the industry’s obsession with having a “scalable business model”.
Each portfolio is uniquely developed based on your requirements
Each client has a truly bespoke portfolio (not invested in a one size fits all house view portfolio). The asset allocation and method of implementation are unique to the specific client’s needs and circumstances (again the opposite of “scaling” the business).
Total transparency in fees and processes
We believe that simplicity is the ultimate sophistication and therefore we cut through the clutter and noise of the industry to distil and implement the essence. The result is an investment solution that is as simple as it can be, yet elegant and effective.
No influence from any external party
Functions such as the quantitative modelling to determine asset allocation, economic research to determine short-term return expectations and tactical weightings, multi-manager research and asset management are all outsourced. Our arrangement with these service providers is that they can be replaced at any time. There will be no link to or influence from any asset manager or major shareholder.
OUR PHILOSOPHY
We believe in designing investment portfolios that have the best probability of achieving a certain pre-determined outcome. We do not invest and then hope for the best. For us investment outcome is about probability, not prophecy. We acknowledge that our clients are sophisticated and well informed. We therefore work with our clients to determine a suitable and realistic investment outcome; together we draft an Individual Investment Policy Statement.
We believe that the strategic asset allocation of the portfolio is the biggest determinant of the portfolio outcome. We therefore make use of an outsourced quantitative model to determine the strategic asset allocation with the best probability of achieving the stated investment outcome we strive for.
“We don’t have to be smarter than the rest.
We have to be more disciplined than the rest.”
WARREN BUFFET
INVESTMENT OUTCOME IS ABOUT PROBABILITY, NOT PROPHECY
Depending on client preference, we either implement the strategic asset allocation and then simply rebalance the portfolio often or we add tactical over- and underweight positions as dictated by our outsourced economic research and short-term return expectations for each asset class.
Again, depending on client preference, we either implement this asset allocation through direct portfolios of listed instruments, exchange traded funds and notes or through an allocation to active asset managers. The process of quantitative and qualitative research to find the best managers and manager combinations is again outsourced.
