"It is not the strongest of the species that survive, nor the most intelligent, but the ones most responsive to change" – Charles Darwin
As we reach half time in 2022, Enhance closes out one of the most productive quarters in our recent history. Volatile stock markets and a return to ‘business as usual’ have combined to stimulate our fiduciary clients to activate strategic investment oversight projects and appointments that were understandably placed on hold during the pandemic. Resultantly, Enhance has seen a significant increase in assets under oversight in recent months - now approaching $50bn across c4,500 investment accounts on our Mosaic platform.
Monitoring or advising on such a significant sample size of fiduciary investment assets provides us with a unique helicopter perspective of not just the investment management industry, but also trends in the fiduciary space. For example, we see a general increase in average investment account size coinciding with lower client numbers across our fiduciary clients – signalling a clear uplift in the net worth of underlying clients being serviced by the sector. Equally we see an increasing number of underlying clients with structures domiciled in multiple locations to provide jurisdictional diversification for their affairs.
These observations dovetail with the findings of multiple global wealth reports, with Capgemini reporting that the global HNWI population expanded by 7.8% (1.7 million new HNWIs) and wealth swelled by 8% (USD6.4 trillion) in 2021. Total HNWI wealth stood at USD85.9 trillion at the end of last year, with the steepest increase in wealth coming in the USD5-30m and USD30m+ net worth demographics. The rich are getting richer, which ultimately is good news for fiduciaries who can focus on providing more complex governance and administration services to a smaller number of valued clients.
To compliment this trend Enhance continues to evolve our core service lines Monitoring, Portfolio and Consultancy to provide fiduciaries with a range of relevant investment oversight options for wealth portfolios. Our consolidated reporting, for example, provides a low cost quarterly investment monitoring option for clients with multiple investment managers and custodians in place. We are also developing non-financial asset reporting capability to sit within this product that provides a summary snapshot of holistic wealth that captures all core assets and liabilities. ESG reporting is being scoped for a 2023 release.
We also see an increased appetite for our advice services, Portfolio and Consultancy, thanks to our solid manager selection performance and personalised advisory approach. In times of market volatility a steady handed and experienced Investment Consultant can deliver considerable value to investors – be that as a point of calm and information amidst the storm or working proactively with incumbent investment managers to ensure portfolios are optimally positioned for prevailing market conditions.
Innovation is one of our five corporate values – with independence, integrity, inclusion and insight – and is a key aspect of Enhance’s DNA. We are always keen to learn from our clients, and indeed competitors, about what products and services are needed to meet the emerging demands of investors and therefore we will begin a programme of client feedback sessions and user groups in the second half of 2022 to help shape our software development and client service roadmap for 2023. We want to always deliver cost effective services with genuine utility.
All Enhance services live on our Mosaic platform and there has been further uptake by fiduciaries in the use of our interactive Client Portal in Q2. The new functionality to manage Action Points raised within our EMAP reports is proving a popular and efficient way for trustees to centrally administer and track workflows arising from our investment monitoring, which is optimised by our evolving and customisable dashboard page that aides in the organisation and understanding of a large number of investment accounts under oversight.
Further strides have been made on the building of data feeds with the investment management community, with over 50% of Mosaic accounts now benefitting from more granular electronic data being received on a quarterly basis to power investment reports. Investment providers that have engaged with us in this regard are beginning to be rewarded for their technological investment as fiduciaries increasingly seek timely access to relevant investment data and consider this aspect in their manager selection exercises.
More generally during the quarter we have continued to reconnect in person with our clients following broken periods of face-to-face contact during the pandemic. Locally we have taken advantage of all that Jersey has to offer with a trip to Les Écréhous along with hosting a gin tasting event where we complimented specialist alcoholic and non-alcoholic gins with foraged ingredients from St Ouen’s Bay. We were also very pleased to attend the excellent Private Client Dining Club dinner at L’Horizon in St Brelade’s Bay, which was very well attended and blessed with beautiful weather for the evening.
Our ongoing growth means that we seek another raft of top talent to help drive our business forward. We have Investment Analyst, Investment Consultant, Developer and Operations vacancies and welcome applications from candidates on and off island to join our growing team. We also have the concept of a talent pipeline which enables us to receive and review speculative applications, which we particularly encourage from investment qualified, data transformation and software development professionals.
Heading into Q3 we expect more stock market volatility as inflation concerns mixed with the ongoing conflict in Ukraine dominate the summer headlines. Covid cases also appear to be on the rise again across the UK, which we hope is a temporary blip in an otherwise downward trend and does not cause the re-emergence of restrictive measures that have so impacted global productivity and underpin some of the inflationary pressures we are now experiencing. Our diaries are full and we look forward to seeing clients in the second half of the season.