I have been consulting to Custom Accounting since before the inception of their Recommended Portfolio in 2001. As a broker and adviser for 33 years I have seen a lot of client portfolios most of which are the product of financial advisers who are happy to deliver average performance less their premium fees.

Anyone who knows Stephanie O’Conner will know that being average and delivering average is not something she would ever tolerate or hope to deliver to her clients and a dynamic approach to managing her clients’ investments is the result.

Diversification through a mindless selection of top 50 stocks is not enough and over twenty years Stephanie has developed an investment process that has stood as a framework for individually tailored client portfolios. Some of the notable characteristics of that investment process include:

  • Taking an asset allocation approach including all major asset classes. Investment is not simply about constructing an equity portfolio.
  • Not diversifying for the sake of it. Asset classes are only held if they add value, make money, not just because they spread risk.
  • Taking a sector approach first and a stock picking approach second. As an example the portfolio has no resources or energy sector exposures at the moment and has completely avoided the commodity price wash out in the last year. The portfolio has only just started to nibble at the bank sector after a 25% correction. Very few advisers have had the conviction and independence of mind to time the banks and avoid resources completely.
  • Cultivating top level industry contacts for portfolio advice, market insights, themes and individual stock guidance. Custom Accounting have developed an enviable list of professional industry contacts that provide a unique advisory role in the investment process.
  • Acting rather than debating. Shortly after the peak in the Australian dollar Custom Accounting had the foresight to move client’s money to the other side of the A$ equation by investing in unhedged international funds and international stocks with significant, compounding, success. The future of Australian superannuation investment will be genuinely international and Custom Accounting are already accessing those asset classes for clients. Only 1% of the average SMSF is currently invested in international shares, it is over 25% of Custom Accounting’s portfolios.
  • Custom Accounting does not diversify for the sake of it but picks stocks individually on their merits. Most financial advisers take the easy route and advise their clients to buy the ‘moron portfolio’ – a diversified portfolio of top 50 stocks anyone could pick. Not at Custom Accounting.
  • Timing. Many stock markets advisers say it can’t be done. Custom Accounting focuses on picking and selling stocks in a timely manner. It goes beyond simply buying big stocks. It includes timing them as well.
  • Selling. Hard for most advisers to do but Stephanie constantly assesses and sells stocks that don’t perform. It is one of the toughest jobs in investment, clearing out the underperformers, but Custom Accounting does it in a disciplined manner.
  • Passion and interest. For many wealth advisers delivering structural advice is the value add and the investment process is an afterthought. But to succeed in the investment markets you need both passion and interest. Stephanie has both.

They say in financial services that clients will forgive mistakes just so long as they are well serviced. I know Stephanie’s impeccable service ethic but I have yet to see the mistakes.

Marcus Padley
MAppFin, LLB, MSAA
Director
MARCUS TODAY PTY LTD
MTIS PRIVATE WEALTH AFSL 473383