Founded by UK financial planners Austen Hempstead and Greg Morris in 1994, the company did not take long to replicate the rapid growth of the emirate in which it was established, moving into South-East Asia after just five years, with the ambitious goal of breaking into mainland China.
The company’s focus has remained in the region since, and it has subsequently opened offices in Beijing, Vietnam, Thailand and Indonesia, with business continuing to grow to this day, as managing senior partner, James Colclough, and global client services manager, Kelly Olver, continue to operate from Shanghai.
“Greg and Austen took the view to avoid Hong Kong at the time as it was already established, and decided instead to move to the mainland. We recently had a large corporate charity gala in Shanghai with clients, institutional partners and friends to celebrate our 20 years there.”
But the company has recently set its sights further than Asia, with Wade, alongside executive director Philip Morris, crossing the Indian Ocean to set up Austen Morris Associates South Africa in Johannesburg in July last year.
Southern belle
“South Africa has started to see a world of opportunity internationally,” Wade explains. “As commodity prices soften and the rand continues to slide, global securities start looking more attractive. There are plenty of amazing companies to invest in within South Africa but its stock market only represents 1% of the global equity market.”
The area’s “opportunity” is primarily rooted in its liberalisation of currency controls, which have removed restrictions on the offshore movement of money and subsequently created a culture of investment, in which residents have opened their eyes to the potential financial gains that permeate the global market.
Wade uses shares in Disney as one example of such a prospect Austen Morris has been pushing its customers toward, with the company up by 30% in the past 12 months, all the while providing a handsome dividend to investors with the promise of the Star Wars and Marvel franchises, and the opening of a Shanghai Disney park looming on the horizon.
“People are starting to realise that if they want to start saving money to send their children to Oxford, Cambridge or Yale, for example, they can they can put it offshore in a different currency,” he says.
“We think all South Africans should look toward investing at least 20-25% of their investible assets offshore now, as the country grows. Just look at Japan 15 years ago; if they had invested their money offshore they would now be in a very good position.”
Unique selling point
Austen Morris was originally established to fill a need for independent financial advice, offshore product solutions and personalised service in the Middle Eastern advice market for British expatriates.
Twenty years on, with Austen long retired to a life of charity work and ATP tennis tournaments (Morris is still very much active within the company), Wade says little has changed as the company prepares to take on the African market.
“We have fine-tuned our selling point over the years but I still think our service remains unique to the market. Our approach is very different to that of our competitors because we invest in individual products.
“We ask a customer if they want to invest in an exchange-traded product, for example, and if they don’t, we can move them on to something else. We are not set in stone like some of our competitors; this is fine for some people but it isn’t very exciting.”
On top of ETFs and structured notes, the company invests in a range of unit trusts, bonds, structured products and growth/value stocks. As a result of being “let down in the past” by alternative investments.
Wade says the company’s investment choices must fulfil the criteria of a dividend-paying product with the potential to be individually managed.
“It is always nice to combine returns with additional capital protection. On the growth side, we like individual small-cap equities and leveraged ETFs. One example of high returns in small cap would be BitAuto, an e-commerce automotive company traded on the New York Stock Exchange.In less than a year we bought it at around 20 to 30 and just sold last week at 70-80.”
The company positions itself at what Wade describes as the “lower end” of the wealth management industry, traditionally providing advice to mid and high-level executives, expatriates, lawyers, accountants and entrepreneurs.
For its services, it charges either a ‘finder’s fee’ for the successful recommendation of a product or, in cases where investments are placed directly into its investment platform, clients are charged 2% upfront with an ongoing charge of 1-1.5%.
“We want customers to stay for a long time. We allow those who disagree with our advice and services to cancel charges, so it really is in our interests to make sure our clients are happy with what we provide.”
Reading the market
Austen Morris provides each of its clients with a quarterly ongoing investor recommendation, in which it illustrates the market areas and sectors it feels will be the most lucrative over the coming months. But what does the company tend to favour in its search for returns?
“It is the fourth quarter and the Fed will keep rates the same, so I think continued easing monetary policy will trump any geopolitical problems. There are a huge number of global issues at the moment; Isis, Ebola, the Ukraine crisis, Hong Kong protests and more, but the bullishness will nevertheless persist.
“The US dollar will remain strong, the euro and the yen will most likely continue to depreciate, and the pound has stabilised following the Scottish referendum and should appreciate in the coming months.”
Beneath the figure-driven, investment- lined exterior, Wade is keen to show the company is also philanthropic. This can be seen through its extensive history of giving back to the areas in which it operates, something it intends to continue in South Africa.
Though its charity work, the company has raised more than $370,000 (£231,492) for causes in its history, including orphanages, children with Aids and migrant issues. On top of this, it has sponsored more than 216 life-saving operations, most recently paying for a child to have a heart operation.
The company’s flagship event, Chi Fan for Charity, has been held in restaurants throughout Beijing and Shanghai since 2009 and, most recently, raised RMB900,000 for local charities throughout both cities.
“A lot of firms like to hijack charity and raise a small amount of money with the ulterior motive of raising their profile, but it is more important than that to us. We are really looking forward to continuing to do this in Africa,” says Wade.
Stoic growth
Despite appearing to have reached a somewhat idyllic position between the contrasting worlds of investment and charity, Austen Morris is not without its problems, even if these result from the company’s self-imposed high standards.
“As a company we do not expand very much at all, so the biggest problem for us has been finding qualified advisers. We look for different types of qualifications but it can be difficult. In terms of who we hire, we have been working with the same people for the past five years.”
Ultimately, it seems likely that Austen Morris’ stoic approach is set to continue for the foreseeable future. Despite a major rebrand at the end of October, which will see it become more service-orientated while retaining the Austen Morris moniker, the company has shirked plans for new offices in new locations to focus on growing its South African operations and expanding its new Manila office.
“We are always looking for the right people to expand our business,” says Wade, but for the time being Wade’s focus lies solely in South Africa.
