FT Adviser recently held its 35th Financial Adviser Service Awards in the prestigious Natural History Museum.
FT Adviser caught up with one of our five-star winners, Henry Cobbe, founder and head of research at Elston Consulting, which won five stars in the Discretionary Fund Manager provider category.
According to Cobbe, London-based Elston Consulting has “advanced the market globally” by launching the first 100 per cent Sustainable Managed Portfolio Service as an alternative or addition to some Environmental, Social and Governance products.
In total, the firm has completed three launches this year, with the second being a direct gilts managed portfolio service.
This was launched after advisers said it would be good for them in November and December 2024, because they would not have to refer new or existing business to a DFM which has a financial planning arm, in case their clients disappeared.
Cobbe explains: “The best proposition ideas come from the adviser firms we work with. All of these came up from discussions with the adviser community”.
Talking to advisers is crucial
For Cobbe, speaking with advisers is foundational to providing five-star service, and the company always has plans to talk with “the 80 firms Elston are working with and all the firms we haven’t engaged with yet”.
The portfolios were designed by Elston Consulting and then manufactured and are managed by Elston Consulting. The direct gilts managed portfolio service had a broader roll out in March 2025.
Cobbe says of the direct gilt portfolio: “A few of the adviser firms we work with have additional rate taxpayer clients, who are ringfencing a large lump of cash to meet tax liabilities after a business sale.
“Parking this in a low-coupon near-term direct gilt portfolio for a 6 per cent gross comparable yield with unlimited amounts guaranteed by HM Treasury seemed like a bit of a no-brainer, and a smarter alternative to complex cash management systems.”
[We need] to ensure advisers have something for all their different client segments
And the company believes strongly that part of providing great service is listening to ideas from other people.
For example, in February 2025, an adviser firm contacted Elston Consulting about rumours to do with “ESG Portfolios” that “contained ESG trackers that in the client’s view were not really sustainable”.
Cobbe says the team had already been monitoring the evolution of the Strategic Defence Review 2025 framework closely and building a database of SDR-compliant funds.
He says: “Two years ago there were hardly any, now there are enough to construct a multi-asset portfolio”.
He says the community had been waiting for the regulator to come up with guidance for the application of the Strategic Defence Review rules to managed portfolio systems and that “this has been delayed and delayed.
“So in the end we took the initiative to come up with the sustainable MPS where the portfolio is constructed with 100 per with SDR compliant funds.”
This is in excess of the 90 per cent target in the Financial Conduct Authority Consultation Paper CP22/20 which was previously considered unachievable.”
Taxing times
Elston Consulting has also been working on a capital gains tax management solutions for GIA portfolios.
They are working on both accumulation and decumulation strategies for balance to be met across the financial sector, because Cobbe believes these are becoming evermore important for advisers thanks to the various tax changes announced in the 2024 Budget.
He explains: “While most of the larger firms are solely focused on accumulation (still), we are one of the few firms to have designed solutions not just for accumulation but for decumulation, yield, smoothed, cash management and CGT-efficient strategies.
“This is to ensure advisers have something for all their different client segments.”
Cobbe tells FT Adviser he had some advisers who were telling them they had clients with “large embedded gains” in a GIA portfolio and “want to alter holdings into a CGT-exempt strategy that could result in material tax bills”.
Listening ears
The third launch was that of the first smoothed management portfolio system.
Cobbe says this idea came about during a roadshow in May, when the firm spoke with many advisers who needed the creation of blended versions of multi-asset and smoothed funds to get balance between return potential and smoothing.
The proposition, which is only available on the Aviva platform, went live in October and has a lower cost that a standalone smoothed fund, according to Cobbe.
According to Cobbe, Elston Consulting is going to broaden access to solutions of this iteration to help even more advisers and their clients.
He says of Elston’s work in this area: “The rebalancing process is time consuming and clunky when done for multiple clients, which can lead to inconsistencies.”
Looking forward
FT Adviser asks about Elston’s perspective on markets and climate.
Cobbe says navigating equity markets is “top of the radar . . . Valuations are stretched in US technology, so we need to consider what else looks like a good opportunity.”
He says the utilities sector, value factor and UK equity income look more reasonably valued.
Cobbe says one of the other big issues that investors have been dealing with is currency. The dollar has been losing strength since the so-called liberation day announcement.
The Greenback has depreciated against most G10 currencies besides the USD, resulting in a 2.3 per cent decline in trade-weighted terms following liberation day.
Political posturing
But it is not the only concern. Cobbe says one of the other challenges they have to help advisers and clients with is the general political and economic paralysis.
Cobbe says: “The chancellor and Prime Minister need to be pro-growth, not anti-growth. It’s not clear which Labour party is in charge — the centrists in the cabinet, or the leftwing on the back benches.
“This internal power struggle is leading to policy flip-flops, which are making the UK continue to seem politically and economically unstable.”
According to Cobbe, this is a concern for taxpayers and businesses alike.
“Due to these factors we need to work on the global rebalancing of wealth.
“We need to see politicians and civil servants to come up with structural ideas for change to get the UK economy back on track.”
What does he think was the most significant Budget announcement?
Cobbe says: “There’s been way too much noise around this Budget. Government leaks, hints, messaging and U-turns on U-turns has created the very chaos that Labour promised to stop.
“Whatever happened to purdah?”
Elston’s focus on the Budget is on three areas: changes to pension rules, taxation and support for businesses.
Cobbe says: “From a taxpayers’ perspective, the focus will be on things such as the mansion tax. Paying tax on illiquid assets is painful, sometimes impossible, and definitely unpopular. Just ask the farmers.
“From a business perspective, we are hoping that less news is good news. The increase to employer NIC has already led to less hiring and less desperately needed economic growth.
“Changes to salary sacrifice regime will impact employers and employees alike.”
But from the perspective of the stock market, the focus is still on to what extent the bond market believes projected debt levels are affordable, as any significant concerns would impact long-dated gilts and sterling.
He adds: “Our overriding concern is that the UK is facing structural economic and demographic challenges that a single Budget cannot fix.
“The politics of envy and a growth agenda don’t go hand in hand.”
Investment approach
Elston’s investment philosophy is that it will analyse major themes and concerns as opposed to predicting market movements and stock levels.
Elston uses three macro factors that drive bond and equity markets: growth, inflation and rates.
“We call this the G-I-R approach and process each bit of news and analysis as regards how it impacts one of these factors”, Cobbe explains.
But there’s a wider philosophy driving Elston Consulting. The DFM uses progressive ideas and technology to aid the rebalancing of wealth and dismantle its discrimination around the world.
Cobbe says: “We are currently witnessing the friction of de-globalisation with peer rivalry between the US/UK and China, and the EU/UK and Russia. Any de-escalation of these geopolitical tensions would help smooth the pathway back to growth.
“At a corporate level, the artificial intelligence revolution is a paradigm shift, as was the beginning of the internet age.”
How is Elston addressing the AI “revolution” when it comes to financial services, especially in terms of how it might affect advisers and their clients?
According to Elston, AI can help with short content and summary but there must always be a human in the loop when it comes to providing detailed communications to advisers and clients, answering phones, and delivering tailored training and CPD to advisers.
Cobbe says: “The most important thing is keeping in communication with our adviser partners.
“We are looking to improve this by delivering more summary content to advisers via our website and LinkedIn, while reserving our more detailed analysis and insights for our paying clients.”
Training is also important to Elston, as well as giving back to the community.
Cobbe adds: “We are also ramping up our CISI-endorsed CPD training for advisers and of course entering for some high-quality awards.
“From a brand building perspective, our sponsorship of the National Schools Regatta has helped build name recognition among parents of 350 or so rowing schools.
“We also have an active charitable giving programme that we should probably talk about more.”
Ruth Gillbe is a freelance journalist
