Hawksmoor Investment Management Limited is authorised & regulated by the Financial Conduct Authority Incorporated in England & Wales Company Number 6307442
This Document describes Hawksmoor Investment Management’s (HIM’s) Responsibilities for, and approach to:
(1) Treating Customers Fairly
(2) Handling Complaints
(3) Best Execution Policy
(4) Protection of Client Monies and Assets
(5) Conflicts of Interest
(6) Remuneration Policy
1. Treating Customers Fairly (“TCF”)
Treating our clients fairly is at the heart of our business. We always aim to put our clients’ interests above our own and this message is directed and endorsed by the HIM Board.
Our regulator, the Financial Conduct Authority (FCA), sets down principles for the businesses it regulates. HIM fully supports the FCA principle that firms ‘must pay due regard to the interests of their customers and treat them fairly’. We do this by making sure that:
- Our clients clearly understand the nature of the services we provide, including our terms, conditions and charges.
- Our clients understand the risks inherent in the markets and securities in which they invest through us.
- We communicate with our clients in an open, transparent and easily understandable manner.
- We have a clear understanding of our clients’ investment objectives, investment experience, attitude to risk, financial standing and resources so that we can ensure the portfolio/s we manage for our clients, and that any recommendation we may make to clients, is suitable for them.
- We do not make promises we cannot keep, for example, offering to provide services we are not able or equipped to deliver.
- The HIM Board lead by example, setting a ‘tone from the top’ that the fair treatment of clients is central to our corporate culture.
- The members of our staff are competent to do their jobs: we provide them with training and supervise them properly.
- We have a transparent, impartial and accessible complaint-handling process.
- We monitor and measure how well we treat our clients and, if things go wrong, we put them right.
2. Handling Complaints
We hope you won’t have cause to complain, but if you are unhappy with something we have, or haven’t, done then please tell us. By letting us know you are unhappy you give us the opportunity to put matters right for you and to improve our services for everyone.
In the first instance you should contact your Investment Manager using their usual contact details. Should you remain dissatisfied or wish to raise your complaint with someone independent to your Investment Manager then please contact our Compliance Team who can be reached by emailing [email protected]. or alternatively at our Exeter office:
The Compliance Officer
Hawksmoor Investment Management Ltd.
17 Dix’s Field
Telephone: 01392 410810 or Email: [email protected]
Or in person at our offices (please see our Contact Us page for directions).
Whichever way you choose to contact us please be assured that we will:
- provide you with a summary of our internal complaints process when we write to acknowledge your complaint or if you request one from us;
- contact you promptly to let you know that we are looking into your concerns and give you an indication of when you can expect to hear from us again;
- keep you regularly updated and, if it looks like our investigation may take more than eight weeks from when you first contacted us, we will write to you with an update;
- look into your complaint thoroughly and, once our investigations are complete, we will send you a final written response setting out what we have found and what our decision is / what we propose to do; and,
- inform you of your right to refer the matter to the Financial Ombudsman Service.
Sometimes a concern may not be about one of our regulated activities. If that is the case, we will still treat your complaint seriously and investigate it promptly and tell you what the outcome is within a reasonable period of time.
3. Best Execution
It is in the interests of our clients and of Hawksmoor Investment Management Ltd (HIM) that we obtain the best possible result when placing orders with other firms (for example, third party brokers) when executing client orders or transmitting orders on behalf of clients. The Financial Conduct Authority (FCA) requires HIM to take sufficient steps to obtain best execution when carrying out transactions. This section sets out our policy for achieving “best execution” when acting for our clients. We will provide our clients with a copy of this policy, if they request one from us.
This policy does not apply to collective investments – providers of Unit Trusts and Open Ended Investment Companies (OEICs) value and price funds in accordance with the FCA requirements set out in its Collective Investment Schemes (COLL) handbook.
When placing orders on our clients’ behalf, or when dealing in the course of managing their portfolios, we take all necessary steps to obtain the best result for them on a consistent basis. What this means is that we will take into account the following factors:
- method and/or likelihood of execution and settlement
- size or nature of the trade
- any other relevant consideration.
For our ‘retail clients’, price and cost will normally be the most important considerations in obtaining the best possible result. HIM will assume this is the case unless the client tells us otherwise.
For our ‘professional clients’ HIM may focus on factors other than price or cost. These may vary from client to client and depend on the nature of the service we have agreed.
Executing Orders – Discretionary and Execution Only Services
Pershing Securities Ltd (Pershing) provide trade execution services to HIM as well as custody and settlement, since HIM is not authorised to hold clients’ assets nor is it a member firm of the London Stock Exchange (LSE).
The trades we initiate through Pershing are carried to the market in the name of Pershing to a selection of Retail Service Providers (RSPs). If the trade is within market size, our system shows the best price available at the time in the volumes we are wishing to trade in. The Investment Manager can then automatically confirm the trade at that price. Exceptionally, where sufficient volume or liquidity is not available in the market to enable an automatic quote, or the quote is unattractive (e.g. it is unacceptably outside the bid-offer spread), the Investment Manager will refer the trade direct to Pershing’s dealers. They will then investigate the market and contact us direct with the best possible available result, upon which the Investment Manager can confirm or cancel the instruction.
For sales and purchases that are for securities quoted outside the United Kingdom, or are complex, or are above normal market size, the custodian will use its discretion in placing the trade. The execution venue it will use will depend on the exact nature of the trade, but will typically be executed through one of the following market makers.
|Investec Securities||SIG (Susquehanna)|
|J.P.Morgan||N+1 Singer Capital Markets|
These market makers have been selected according to the criteria outlined above.
The majority of the trades for private client portfolios are in open-ended funds, where issues of best execution do not arise.
Executing Orders – Vanbrugh, Distribution and Global Opportunities Funds
In the case of the Vanbrugh, Distribution and Global Opportunities Funds, HIM has been appointed by the Authorised Corporate Director (ACD), Apex Fundrock, to act as the investment manager.
Transactions in market securities are traded via ‘Approved Brokers’, who provide best execution and trade and transaction reporting. A list of our current ‘Approved Brokers’ is:
|Collins Stewart||Peel Hunt|
|Fidante||N +1 Singer Capital Markets|
The majority of the trades for the Funds’ portfolios are in open-ended funds, where issues of best execution do not arise.
If a client has given instructions that price is not the most important factor in executing their instructions, HIM will make every effort to comply with the instructions but cannot guarantee this. This may be due to either the nature of the order, or the type of financial instrument the client wishes to trade in.
Depending on the nature of our agreement with the client, HIM will either:
- make all decisions as to where the orders are placed in relation to the execution venue; or,
- accept specific instructions from the client regarding the venue where the order is executed.
Where we use third parties, for example approved brokers, we will ensure that our Terms and Conditions with them provide that they will make all reasonable efforts to provide best execution when we instruct transactions through them.
Conflicts of interest
Please refer to section 5 for further information.
Monitoring and Reviewing our Best Execution Arrangements
HIM has in place systems and controls to ensure that we obtain the best possible results for our clients when executing orders. These are monitored periodically. Our execution policy and arrangements are reviewed whenever there is a significant change affecting our ability to continue to obtain the best possible results for our clients and at least on an annual basis.
All relevant employees are made aware of our policy and understand the importance of best execution.
4. Protection of Client Monies & Assets
Hawksmoor Investment Management Ltd. (HIM’s) bespoke private client discretionary portfolio management services are provided to our clients through ‘Model B Agreements’ under which HIM arranges for the custody and settlement of the holdings in a client’s portfolio to be provided by a specialist third party provider (“the Custodian”), which itself is authorised and regulated by the Financial Conduct Authority.
Under the Model B Agreement, the Custodian provides clearing and settlement, safe custody, nominee and associated services for those clients of ours who we may introduce to it. The Custodian may also provide additional services as we may agree with it from time to time.
The current terms and conditions of the Custodian and the principal terms of the Model B Agreement with it as applicable to our clients (“the Agreement”) are contained in HIM’s Client Account Guide. The Custodian may amend the terms and conditions of the Agreement from time to time by notice in writing to us.
By acceptance of the terms of the Agreement, our client agrees that:
a. HIM is authorised to enter into the Agreement on our client’s behalf as our client’s agent;
b. acceptance of the terms of the Agreement will constitute the formation of a contract between our client and ourselves and also between our client and the Custodian and that our client will be bound by the terms of the Agreement and the terms and conditions of the Custodian (summarised below) accordingly;
c. we are authorised to give instructions (as provided for in the terms of the Agreement) and provide information concerning our clients to the Custodian and the Custodian shall be entitled to rely on any such instructions or information without further enquiry;
d. the Custodian is authorised to hold cash and investments on our client’s behalf and is authorised to transfer cash or investments from our client’s account to meet our client’s settlement or other obligations to the Custodian.
Under the Agreement our client will remain a customer of ours but will also become a client of the Custodian for settlement and safe custody purposes only. HIM retains responsibility for compliance and regulatory requirements regarding our own operations, for the supervision and operation of our client’s account and generally for our relationship with our client. In particular, it remains responsible for approving the opening of accounts, money laundering compliance and the accepting and executing of orders in investments. The Custodian is not responsible to our client for those matters and, in particular, neither provides investment advice nor gives advice or offers any opinion regarding the suitability or appropriateness (as appropriate) of any transaction or order.
HIM may control, but is not permitted to hold, client monies or assets.
5. Conflicts of Interest
The FCA requires HIM to take all reasonable steps to identify any conflicts of interest between our firm/an employee/any associate of our firm, and any of our clients or conflicts of interest between one client and another. A conflict of interest is a situation where HIM or its employees or associates have competing interests which may prevent services being provided to clients in an independent or impartial manner.
HIM recognises that, in the course of its business, there are circumstances which may give rise to unavoidable conflicts of interest. This section summarises the primary circumstances where conflicts may arise and sets out the specific measures that HIM employs to manage, or remove, these actual or potential conflicts of interest.
Policies and Procedures
HIM has policies and procedures that it has embedded throughout our business to ensure that conflicts are identified, considered, mitigated and either managed or removed altogether.
HIM’s members of staff undergo regular training and are provided with guidance when a conflict situation arises. HIM’s management team is responsible for ensuring that the risks within their business areas are identified and managed appropriately.
Where the interests of one HIM team and its clients may conflict with another team and its clients, the management structure is separated.
HIM has a remuneration policy in place. Please see section 7 for further information.
HIM has best execution arrangements in place. Please see section 3 for further information.
Dealing as principal
HIM does not hold principal positions in securities, nor do we deal on our own account.
HIM pays for investment research through our own financial resources and not through the use of dealing commissions.
Outside business interests
All employees are required to disclose outside business interests and directorships when they join HIM and are reminded of their continuing obligation to disclose them on a regular basis.
Personal account dealing
HIM has a policy that controls personal account dealing undertaken by our employees, including on their partners’ and dependents’ accounts. HIM’s investment staff may themselves maintain investments in HIM’s managed fund of funds, The Vanbrugh, Distribution and Global Opportunities Funds, and in other securities included within our discretionary portfolios. Where this is the case, HIM discloses this via our marketing and promotional material.
Gifts and inducements
HIM has a policy and procedure in place for the giving and receiving of gifts and hospitality. Employees must not solicit nor accept any inducement which may conflict with the duty we owe to our clients, nor offer inducements which may conflict with the recipient’s duty to its own clients.
Employees may, from time to time, receive non-monetary benefits, or gifts, from clients, providers or other third parties. Any such benefits are typically of a modest nature and relate to provision of literature, participation in seminars training and hospitality.
All gifts and non monetary benefits, unless of a token kind, require prior approval and are recorded in our register.
Aggregation and allocation
To ensure that deals cannot be allocated in favour of one group of clients or staff, HIM operates an aggregation and allocation procedure covering both our discretionary portfolio services and our managed funds of funds.
For portfolios under our discretionary services we will always only purchase the institutional or ‘clean’ units or share classes of open-ended funds which do not pay commissions.
Where a client transfers into their portfolio older style units or share classes of an open-ended fund which pay a commission, we will seek to transfer them into an institutional or ‘clean’ unit or share class at the earliest practical opportunity.
In addition to our Discretionary Portfolio Management Service, HIM offers an alternative discretionary service – the Capstone Service – which contains ‘core’ holdings in one of our managed funds-of-funds, the Vanbrugh, Distribution and Global Opportunities Funds. The conflict in the use of our own managed funds in a discretionary service is mitigated by:
(a) the choice of service being entirely the client’s, who is provided with clear Guides and Schedules of Charges for both Services and
(b) the annual management fee for the Capstone Service not being applied to the element of the overall portfolio in the HIM-managed funds.
6. Remuneration Policy
HIM’s long term success depends on its ability to attract, and retain, top talent.
HIM’s Pillar 3 disclosure on remuneration is based on data as at October 2021 and as per the December 2020 accounts.
Employees who conduct services for Hawksmoor Group Ltd (HGL) and Hawksmoor Investment Management Ltd (HIM) are captured by this statement.
HIM’s approach seeks to ensure that:
- commercial interests are balanced appropriately against the need to attract, incentivise, retain and develop top talent;
- high performance is rewarded in the context of appropriate risk management;
- all employees are rewarded fairly for their contribution to the continuing success of the Company; and,
- pay decisions are considered across the board and take into account the different nature of the roles and the level of seniority of staff.
Remuneration Decision Making & Committee
The Remuneration Committee operates the highest standards of corporate governance, including a regular review of its remuneration policy. It considers a range of data in ensuring that the policy set remains aligned and supportive of the Company’s longer terms strategic objectives. For example, it considers financial performance, compliance reports, regulatory developments, employment matters and market conditions.
No individual is included in decisions regarding his or her remuneration.
The following groups of employees have been identified as Code staff:
- All Senior Mangers as defined by the FCA regulation.
- All Certified Staff requiring qualifications to complete their role under SMCR and those who have manage others in a certified role.
The Committee also reviews, and will continue to monitor, other employees to consider whether they satisfy the test of “any employee receiving total remuneration that takes them into the same remuneration bracket as senior management and risk takers, whose professional activities have a material impact on the firm’s risk profile”.
As at 31 December 2020, 30 members of staff were identified as Code staff all were employed by HIM.
Remuneration Structure and Link between Pay and Performance
The Company’s policy is to cultivate a partnership-type ethos among the senior members of staff, recognising that individuals have a responsibility for driving the future success of the Company and creating shareholder value. It aims to ensure that all key members of staff have decent basic salaries, the opportunity to earn attractive levels of bonus by way of cash and/or equity and a real say and influence in the management of the company, both strategic and day-to-day.
The Company operates two bonus schemes, both mainly based on the Company’s performance, with a further discretionary element based on individual performance or contribution in the course of the preceding year, and certain other criteria.
The bonus calculation for fee-earning Offices/Teams is based on separate P&Ls with the bonus pot being a percentage of the Office/Team’s revenues net of the Office/Team’s salaries, direct costs and an allocation of most central costs. To earn full bonuses, certain criteria need to be met, to encourage behaviours in line with the best regulatory practice and with the Company’s stated Values.
For central non-fee-earning staff, at the beginning of the year, each member of staff is allocated a certain number of “Partnership Points” giving the owner the expectation of participation in any annual bonus pool decided upon by the Board. The number of Partnership Points awarded to a member of staff will not necessarily be fixed from year to year and may fluctuate (in either direction), for example, because of level of contribution or achievement, specific new responsibilities, new relevant qualifications.
Also, a certain number of extra Partnership Points (about 19% of the total) are always reserved in any one year and are awarded, in addition to the ‘basic’ awards outlined above, to recognise particular effort, performance, achievement or other contribution to the Company’s success.
The governing body concludes that the Companies fall within proportionality tier 3 (previously tier 4).