Shining a light: How our founding principles continue to guide the pathway ahead

By harnessing talent, technology and innovation, we are determined to deliver tomorrow’s investment management today. But this vision for the future remains firmly rooted in our founding mission to put investors first.

Jonathan Gain, founder and Chief Executive of Stellar Asset Management, talks about what inspired him to set up the company in 2007 and how these original values and ambitions continue to drive the business forward today.

Many aspects of business can be measured and tracked – turnover, costs and profits to name but a few. But not everything that counts can be counted. Chief among these intangibles are the purpose, values and culture that motivate employees, clarify their order of priorities and guide how they treat others.

In a business like ours, this shared understanding of the right thing to do is especially critical. Our estate planning and investment management services help clients make provision for their loved ones, whilst managing their hard-earned wealth in way that they can control. Our clients entrust their hopes and dreams to us. Responding requires integrity and dedication.

What we stand for

To know what characterises and guides us here at Stellar, we need to go back to our foundation. Before setting up Stellar in 2007, I had been making a comfortable living as a director in a leading merchant bank. I learned a lot there including the value of rigour, original thinking and hard work

But I myself was not comfortable. The market I worked in had become complacent – offering one-size-fits-all solutions that in reality fitted no-one. Companies were also putting their own interests before their investors. Most were reluctant to disclose let alone share the investment upsides, for instance. Few if any were taking proper care over costs, fees and delivering value for money.

I therefore wanted to create a company with a fair deal for investors at its heart. Offering flexible and innovative solutions that reflect the real needs and aspirations of clients and their families. Sharing the investment returns. Ensuring transparency and accountability in everything we do. The light that we are able to shine on a complex estate planning and inheritance tax landscape creates a clear pathway for advisers and their clients.

For me personally, the new venture was a big risk. I had left behind the financial security of my previous job and put all my savings into Stellar. But it was worth every penny. I have been able to follow the principles that I believe are right without compromise. I also had, and continue to have, a great team around me, including highly experienced colleagues from my previous company.

Living our vision

So how do we live our vision and uphold our values in practice?

Fairness

A good place to start is what we mean by ‘fair’. We set a realistic long-term target return – typically 5%. But we do not stop there. Unlike many other firms, our investment returns are uncapped, so clients get their rightful share of the benefits when returns exceed target.

Protection

The other key plank of our investment philosophy is diversification. As the economic impact of COVID-19 and the market fluctuations seen in 2022 have underlined, diversification is the most effective risk mitigant. We diversify our portfolio across a range of asset classes, all tangible and all located in the UK and our AIM portfolio across forty stocks.

With investments spread, dips in one asset class can be offset by gains in others.

Consideration and innovation

What also differentiates us and reflects our guiding vision are innovation and choice. All of our services seek to provide 100% relief from inheritance tax after just two years. At the same time, we want investors to retain full control of, and access to, their capital. Rather than locking capital up in trusts or insurance policies, we are able to give our investors more choice and the opportunity to retain ownership of their capital throughout their lifetime.

Understanding

To understand investor circumstances and what they most want for themselves and their families, we need to listen. The more chance they have to share their story and articulate their aspirations, the better the solutions we can offer.

Some aspects of the engagement can be delivered through self-service and digital channels. In turn, data analytics can enhance decision making. But when clients want to discuss their future, we should be on hand, ideally in their locality. Here at Stellar, we have created a network of regional account managers to ensure that we can offer this kind of personal engagement and tailored support. Our people on the ground are seasoned professionals who know their communities, are willing to take the time to get to develop individual relationships with clients and are able to engage in ways they can relate to.

Transparency and value

We take pride in delivering real value for money. From the outset, we set out a fee structure which was equitable and appropriate rather than copying what everyone else in the market was doing. We carefully control our costs and cut out needless waste through close monitoring and investment in the latest technology.

We disclose all our fees and provide clear and concise performance reporting so investors can see what they are paying for and the value we deliver in return. We are now looking to enhance our investor engagement and disclosure through a new and improved investor portal.

Pathway to continued success

So what does the future hold? We continue to grow in funds under management, the breadth of our service and range of expertise within our team. But in keeping with our founding principles, this is measured expansion rather than growth at all costs. We want to improve our ability to put investors first through innovative product development, deeper relationships and enhanced service.

Innovation

Our focus on innovation is exemplified by our new Stellar Nova EIS Fund. Enterprise Investment Scheme (EIS) funds offer attractive tax reliefs for investors. In most cases, however, the enterprises these funds invest in are left to sink or swim in the riskiest early stages of their development. The result is a needlessly high failure rate and reduced financial returns for investors. The Stellar Nova EIS Fund is different. By partnering with Nova, a company that advises and nurtures start-ups, the enterprises we invest in have five times greater chance of success.

Protecting the generations to come

As a company that helps people build a better future for their children and grandchildren, we are deeply conscious of what kind of world these future generations will live in. As part of this, we have always preferred to invest in tangible assets that support communities and employment – housing development and growth companies, for example. This is not just altruism. Supporting the real economy makes sound investment sense.

Sustainability is just as important. In March 2021, we signed up to the UN Principles on Responsible Investment (PRI). This is a journey that will take time to embed and it will also develop. We also recognise that there are some areas of our investment portfolio over which we have no direct control such as the management of companies within our AiM portfolio. But we are committed to continuous improvement.

Enabled by technology

Further investment priorities include digital transformation across all our client facing and investment management services. Harnessing artificial intelligence, data analytics and other advances in technology helps us gain richer and more precise insights into individual investor demands, how these are likely to change over time and how they fit together with the needs of other members of the extended family. These insights help us to develop customised solutions, which can adapt to different circumstances and life stages.

Empowering our employees

Our ultimate power is talent. We want to attract professionals to share our values and enable them to share in the rewards in return. We want to provide a progressive and compelling workplace where everyone can be themselves and where everyone has a chance to shine.

Our investment in learning and development spans human skills such as communication and teamwork, as well as the all-important technical capabilities and professional qualifications needed to deliver excellence to investors. From this year, development is being augmented by a new leadership programme, with a particular focus on how to steer through times of complexity and change.

Excellence is an attitude

So we know where we came from as a company, what we stand for as a result and why. However much we grow, we will never forget what it takes to deliver outstanding outcomes for investors and why this is the key to our success. For us here at Stellar, excellence is an attitude.

If you would like to discuss any of the issues outlined here or want to know more about how Stellar Asset Management can help you to deliver great estate planning for your clients, please contact a member of the team on 020 3195 3500 or contact enquiries@stellar-am.com.

Written by Jonathan Gain

Important Information

Stellar Asset Management Limited does not offer investment or tax advice or make recommendations regarding investments. Prospective investors should ensure that they read the brochure and fully understand the risk factors before making any investment decision. The value of investments and the income from them may fall as well as rise and is not guaranteed. No assurance or guarantee is given that any targeted returns will be achieved. Forecasts of potential future results are not a reliable indicator of actual future results.

Stellar Asset Management Limited of 20 Chapel Street, Liverpool, L3 9AG is authorised and regulated by the Financial Conduct Authority.