Chief Investment Strategist, Ben Seager-Scott is responsible for Tilney’s investment views. We spoke with him to find out how he develops our investment strategy, what he enjoys most about his job and why he thinks cognitive bias can be so dangerous.
Ben’s background is in science
What is your background?
My background is in science. I studied Chemistry at university and then completed a PhD in Biochemistry, but I knew I didn’t want to be a bench scientist after completing my studies. For a long time I thought I wanted to be a patent attorney – working on the legal side of science. But during my PhD, I had to apply for a patent for my project, and when I read the document and realised that I didn’t really know what it said, I knew it wasn’t a route I wanted to go down!
How did you end up in the investment industry?
I had a few part-time jobs, stacking shelves and so on, and then with my first proper job after university I moved from science into investments. I started off analysing biotech investments for a small asset manager in Bristol. After the financial crisis there was much less demand for biotech analysts, as biotech firms were at the riskier end of the equity spectrum. As my company was expanding, I was able to move from being a biotech analyst to a generalist analyst in 2007.
Were you interested in investments beforehand?
I’ve always had an interest in investments. My dad works in the industry and when I was young I’d always been around them. For me, the interesting thing about investments is that they take a view on everything in the world – all current affairs. Every time you watch the news, there is some sort of impact on the investment landscape. Ultimately, investments – and science – come down to understanding what’s going on in the world. From my point of view, there are a lot of similarities, intellectually.
Every time you watch the news, there is some sort of impact on the investment landscape.
When did you join Tilney?
After working in Bristol for a few years, I was drawn by the bright lights of London – it’s the centre of investing in the UK. I joined Tilney in May 2011 as an Emerging Markets and Asia Pacific analyst. It’s been an interesting journey. Tilney has grown a lot in recent years and many new opportunities have come up, so I’ve been able to move from fund analysis to investment strategy.
Being an investment strategist
What does an investment strategist actually do?
Essentially, a strategist develops the company’s current investment views and turns these into asset models that can be used to create client portfolios. An important part of the strategy is the look ahead. Everyone knows what’s happened in the past, and we give an interpretation of how these events fit in with our overall view. But most importantly, we need to explain what we think will happen next. We need to say “these are our concerns, here’s what we think is going to happen, and these are the key things we’re looking out for.” Once we’ve determined the strategy we also need to share it with our advisers, investment managers and clients. We have offices all over the UK, so this part of the job involves a lot of travelling.
Asset models tell us which areas of the market to invest in, to get the best potential return for a given level of risk.
Can you tell us more about the asset models?
As part of the strategy we develop a range of asset models. These broadly tell us which areas of the market to invest in, to get the best potential return for a given level of risk. There are two stages to the asset allocation process. The first is strategic – this is the long-term view, looking past all the market noise at the moment. This is driven heavily by a quantitative model – we add various inputs and it creates a long-term projection. Next we apply a tactical overlay, which is what I focus on. These are shorter-term views – anywhere from six months to a few years – on what we think will happen in the markets. A lot of what I do is looking at the interplay between what’s happening in the world and what the markets are pricing in, and then looking for the opportunities within this.
Working at Tilney
Which team do you sit in?
I’m part of the Central Investment Team. As Tilney expanded its nationwide presence, this team grew from a handful of London-based analysts to more than 30 people across the UK.
How do you all work together?
The team is split into subunits with different primary responsibilities. I sit within the asset allocation group, and primarily work on the tactical side of asset allocation. There’s also the fund selection group. There are tens of thousands of funds available in Europe, and the team aims to find the very best managers out of these. They find managers that consistently add value above their fees, and those who we believe will continue to outperform. Each fund analyst specialises in a particular sector, such as European equities or commodities. We also have a portfolio management team that looks after our central portfolios, and a team responsible for centralised dealing.
What do you enjoy most about the job?
Everything that happens in the world has some sort of investment impact, and I enjoy finding out what’s happening in the world and then distilling this into an investment strategy. I also like the problem-solving element – “if this happens, then what will it mean for the investment environment?” I look at the different probabilities and turn these into a strategy.
And what do you find the most challenging?
Resisting cognitive bias. It is present everywhere – the fear of missing out, trend following and confirmation bias to name a few. It means I need to consciously pause before making a decision, and think “right, is this fundamentally rational or am I being biased?” On my desk I have a list titled ‘20 cognitive biases that screw up your decisions.’ I use that as my touchstone, as it’s so easy to become swayed by bias. Some sort of bias is always present, so the best you can do is try and identify it, and thereby mitigate it. The world is messy and data won’t automatically support your view, meaning I need to resist the urge to have a theory and then look for data to support my argument. Instead, I need to consciously go out and seek a counter-argument to assess.
What would you be doing if you weren’t an investment strategist?
I’d have probably ended up in the sciences, or I may have enlisted in the navy. I used to be a sea cadet, so there’s a natural progression into the navy.
Find out more
Find out more about our investment philosophy and process in our How we manage money guide.
Do you have any questions? Speak to your usual Tilney contact or get in touch by calling 020 7189 2400 or emailing firstname.lastname@example.org
This article was previously published on Tilney prior to the launch of Evelyn Partners.