Why Are There No Questions on Attitude to Risk?

We believe most of these risk questionnaire tools to be pure nonsense as they are mechanically generated. It is our view that they either give misleading outcomes or simply classify everyone as being in the middle, balanced. Fundamentally, such analysis requires face-to-face contact and discussion to gauge individual nuances, which no automated decision tool can ever detect.
For these reasons we are sceptical of any company operating automated guidance, which then go on to tell you which particular fund or strategy to follow.

What makes SCM Direct different from other wealth managers/online platforms?

We believe our 100% transparency on fees and holdings, common sense approach to everything we do, the founders’ alignment with clients by being invested in all the portfolios on exactly the same fees and terms, and track record combine to set us apart.

Our levels of highly liquid and highly diversified portfolios at a very attractive cost are add to our individuality as modern investment managers. The company is 100% owned by the founders and as one of the largest clients within the SCM portfolios they do not have many of the conflicts of interest that are infect so many financial organisations.

SCM does not ‘flog’ anything and we are not ‘traders’ so we do not make extra revenues or take cuts from any of our activities.

What is your record personally and for similar portfolios?

This is all detailed within the track record section of the site (Link).

What financial security do I have? Where are my investments kept? Who is the custodian?

Hubwise Securities Limited are the custodian to SCM Direct. For more information on the role of Hubwise Securities, please see the GIA page – labeled “Hubwise Securities”. This can be found here.

Client Money 

All client cash is held in client bank accounts (Client Accounts) with FCA authorised UK Banks, Building Societies or other institutions. Hubwise may choose from these but currently use Bank of Scotland, NatWest Bank and Barclays Bank.

Client bank accounts are designated as trust accounts and are segregated from Hubwise’s own monies. They may include the balances of other clients but are operated and administered in accordance with FCA CASS (Client Money) Rules.

If one of those Banks fails or becomes insolvent the client may be entitled to claim compensation under the FSCS up to £75,000 of any loss. The level of compensation will be reduced if the client already holds an account with the Bank

Asset Protection 

Hubwise is responsible for the safe custody of all assets held in Client Accounts. Such investments are registered in the name of a nominee company which will normally be Hubwise’s wholly owned subsidiary Hubwise Nominees Limited. Occasionally, as may be required for certain customers and certain asset classes, another nominee company may be selected in accordance with the FCA rules and with the agreement of the introducing intermediary. Hubwise Nominees Limited is a non-trading “dormant” company set up to hold investments on behalf of Investors.

Hubwise are responsible and liable for its nominee to the same extent as for its own acts including for the avoidance of doubt, losses arising from fraud, wilful default or negligence. Investors’ investments will be registered in the same name as those of other investors (pooled together with other investor investments).

Hubwise have insurance in place for Professional Indemnity and Crime as well as an agreement between Securities and Nominees to further strengthen asset security. The FSCS also provides compensation of up to £50,000 per investor for eligible claimants in respect of UK Securities and Funds held in custody. Hubwise has never had a FCA action or investigation taken or carried out against it or its employees since incorporation.

Hubwise Securities Limited is authorised by the FCA as a BIPRU €125k limited licence firm and, as the only regulated company within the group, is the only group entity subject to the ICAAP process. Hubwise Securities Limited has no trading-book exposure as it acts only as agent in order to place aggregated deals with Fund Managers for collective investments and market counter-parties to place deals in securities. Hubwise Securities Limited does not provide investment advice or deal as principal at any time.

What does SCM Direct NOT provide?

SCM Direct does not provide any financial advice whatsoever or offer sole investment products outside the portfolios described on our website. Our provision of model portfolios does
not involve us considering the investment requirements of individual clients. We manage the model portfolios according to the stated objectives of the portfolio(s) and within the various parameters detailed within our Terms and Conditions. If you are unsure of the suitability of any investment contained in this website, please contact an independent financial adviser.

SCM Direct also does not hold any client monies or any assets whatsoever. Hubwise Securities Limited, as part of the custodial relationship with all SCM Direct clients, are responsible for holding all assets (including the ETFs) on your behalf.

What are the tax implications of investing with SCM Direct and will I receive tax statements?

The tax implications will vary according to your own personal financial circumstances. If you want any further guidance you should speak to an Accountant or independent financial adviser.

Annual UK tax packs will be produced for clients at the end of each tax year and will be via the secure client online account showing the annual income and capital gains for each portfolio.

What am I getting for the SCM Direct annual management fee of 0.4% + vat?

Professional fund management led by our highly respected Chief Investment Officer (CIO), Alan Miller who has over 29 years investment experience and possesses a long track record of outperformance.

Can I use an adviser to access SCM’s portfolios rather than use the direct SCM services?

This is completely your choice. There are normally extra costs associated with using advisers but you might feel that the extra financial advice, which they may offer you, makes their fees worthwhile.
The 3 SCM core portfolios are available via independent financial advisers if the adviser uses one of the following platforms; Ascentric, Novia, and Transact. You just need to ask them to contact us at SCM Direct at enquiries@scmdirect.com or call 020 7838 8650 and ask for a member of the investment team.

SCM Direct says it operates a Profit for Purpose Model — What Does That Mean?

A percentage of profits generated by SCM Direct will go to the True and Fair Foundation which supports small dynamic charities doing transformational work in the community; primarily in
the UK.

Is SCM Direct regulated by any organisation?

SCM Direct is a trading name of SCM Private LLP, which is authorised and regulated by the UK’s Financial Conduct Authority (FCA) to carry out investment business.

If SCM is so sensible and straightforward, why doesn’t everyone do it?

The way SCM operates is extremely efficient and cost effective. This model doesn’t allow for high fees, bonuses, or commissions to be charged.

In addition some fund management organisations run a scatter gun approach. By running many different funds, there will always be one or more that are doing well and then can be aggressively sold to investors. Meanwhile those that do badly will often retain their clients as there tends to be great inertia in finance. Heads the fund manager wins. Tails the client loses.

I want to compare SCM Direct portfolio performance using other online tools — is this possible?

The SCM Direct investments are segregated portfolios, not listed funds, and performance is not available via third-party websites.

Monthly performance is published through the portfolio factsheets, and clients are able to monitor their portfolio via the secure online account.

Please remember that the performance we show is after ALL costs and charges. You can therefore not compare this with many platforms that will show the performance of a fund BEFORE their charges.

How much have the founders of SCM Direct personally invested in the portfolios?

The founders originally invested seven figure sums (i.e. £1m or more) in each of the 3 core GBP portfolios and have added further significant amounts since the portfolios started.

How do I monitor my investments and your success or otherwise?

Just login to your online account to view your portfolios performance and valuation using the previous business days closing prices.  We also provide a pie chart of investment allocation by sector and performance graphs over different dates for each product you have with SCM direct.

Does SCM Direct give any advice?

No. If you need any advice regarding the suitability of the various portfolios or any other advice specific to yourself and your personal financial needs, you need to seek advice from an Independent Financial Adviser.

We can answer general questions regarding the various investments within the portfolios but we cannot under any circumstances recommend the suitability of our portfolios.

Do I really need to diversify my investments?

It depends. Of course if you are looking to make huge returns, it is very unlikely you will ever achieve this through high levels of diversification but in the same way, high levels of diversification can help reduce economic and market shocks. In the famous story about the Tortoise and the Hare, the Tortoise wins the race even though the Hare got off to a great start! We are happy to be the Tortoise.

Can my investment lose money?

Yes. Nothing is guaranteed and markets and the income derived from investing can (and often do) go down as well as up. This is why we always recommend that you take at least a 5-year time horizon when investing, so you can ride the highs and lows without being forced to panic and sell at precisely the wrong time.

Our portfolios offer extensive diversification, which can reduce the overall volatility and downside associated with narrow, concentrated funds or portfolios.

Can I see all the holdings in my portfolio online (PC/tablet/smartphone)?

Yes. Using your existing log in your holdings are displayed under the ‘Portfolio Valuation’ heading.

We strongly recommend that you should NEVER invest in anything that you do not understand and with which you do not feel entirely comfortable.

We do not bombard anyone with daily reminders to invest or daily views of the markets as we think people should invest when it best suits them, if at all, rather than being bamboozled by sales calls.

Sign up to our monthly factsheets