On narrow markets, the pursuit of quality and catching the investment bug
In our regular video series, we interview the wealth sector’s key decision-makers to discover how they think about life, both within the world of investment and beyond it; what brought them into the business and what keeps them here; and what makes them and their companies tick
Ongoing market concentration is an aspect of the investment outlook that James Richards, a chartered wealth manager at Walker Crips, picks out as a potential cloud for investors – albeit one that could contain the proverbial silver lining for those running active funds.
“The narrowness in the market – particularly in the US, but also in Korea – really concerns me,” he tells Wealthwise editorial director Julian Marr in Wealthwise’s latest Choice Words video. “It is quite a worry that we do not necessarily need to see a big drop or fall in earnings to have a big impact on the market.
“A lot of investors – particularly younger ones, before they come to wealth managers – often invest passively so this is a concern. Yet it also gives me hope there is an opportunity here for active management to really take hold and do well. If there is a pullback, people invested in quality investments can hopefully thrive.”
We really focus on having our principles of fund management – and then ask, Are fund managers aligned to that so we can be aligned for our clients?”
With the interview being recorded towards the end of July, the conversation naturally turns to the striking dominance of South Korea’s equity market by just two companies. “A lot of growth managers we are speaking to are invested in SK Hynix more than Samsung but it does almost seem to have come from nowhere,” says Richards.
“Over 2026, suddenly these two companies are each making up some 30% of their index, which is crazy – and it is particularly the leverage plays I am worried about. The 2x or 3x ETF plays on SK Hynix alone are quite worrying – there is a lot of money flowing in and out every day.”
So what does Richards himself look for in individual investments – and what would he consider a red flag? “I tend to invest in funds over direct equities – and so it is managers’ processes that really are my ‘go-to’,” he replies. “As such, a red flag would be something that is not repeatable or if they say they are doing something and then do something else – for example, if you have a philosophy of not buying banks and then suddenly you buy a bank, that would be a red flag.
Under the bonnet
“It would not necessarily be an instant ‘sell’ – but it is something you would want to really get under the bonnet with. But it is the process. Is it repeatable? Is it explainable both to us as investors and to our end-clients? So we really focus on having our principles of fund management – and then ask, Are managers aligned to that so we can be aligned for our clients?”
Later on, when asked what qualities he believes drive a successful wealth management business, Richards immediately focuses on the human element. “It has to be people,” he replies. “People who care, who are passionate about investing and about looking after clients and other people and who then support each other. If you have good people, everything flows from that. Investment philosophy is clearly very important – and hopefully good returns – but clients care about trust and they care about relationships.
“And so it is super-important – just to have good people who will help everyone work together. You might not be speaking to a client directly but, so long as you care, you will want to help the investment manager help the client. That is better for the company and it is better for the client.”
A full transcript of this episode can be found after this box while you can view the whole video by clicking on the picture above. To jump to a specific question, just click on the relevant timecode:
00.00: What excites you about the current investment outlook? What worries you?
02.10: What do you most look for in an individual investment? What constitute ‘red flags’?
02.57: How would you explain risk to someone who does not work in investment?
03.46: What was your path into investment – and, if you hadn’t taken it, what do you think you would be doing now?
04.27: What kind of investor do you think of yourself as?
05.10: What is the biggest investment mistake you are prepared to admit to – and what did you learn from it?
06.04: Outside of work, what is the strangest thing you have ever seen or done?
06.50: What is the best piece of advice you have ever been given?
08.02: What qualities drive a successful wealth management business?
09.05: Two Choice Words recommendations, please – one a book; one a free choice?
Transcript of Choice Words Episode 42:
James Richards, with Julian Marr
JM: Well, hello and welcome to another in our series of ‘Choice Words’ videos, where we get to meet the great and the good of UK fund selection and UK fund research and find out what makes them tick. I am Julian Marr, editorial director of Wealthwise Media, and today I am delighted to be talking to James Richards, who is a chartered wealth manager at Walker Crips, which was recently acquired by Phillip Capital. Hello, James.
JR: Hello, Julian. Thanks for having me.
JM: It is an absolute pleasure. Let’s jump straight into my first question – what excites you about the current investment outlook. What gives you pause for thought?
JR: A pause for thought first and it is the narrowness in the market – particularly in the US, but also in Korea. It really concerns me – that we do not necessarily need to see a big drop or fall in earnings to have a big impact on the market. So that is quite a worry for me.
A lot of investors – particularly younger investors, before they come to wealth managers – often invest passively. So it is a concern – but that also gives me hope there is an opportunity here for active management to really take hold and do well. If there is a pullback, people invested in quality investments can hopefully do well and thrive.
JM: Yes, the Samsung and SK Hynix situation – I know it cannot have come from nowhere but, everyone seems to be talking about all of a sudden. Is this an ambush and how did it happen? And is there more in Korea – and Taiwan and elsewhere – you should be looking at?
JR: Yes, there is certainly opportunity there – and a lot of our investors, a lot of growth managers we are speaking to, are invested in SK Hynix more than Samsung – but it does seem to have come from nowhere. Over 2026, suddenly these two companies are making up 30% of their index, which is crazy – and it is particularly the leverage plays I am worried about. The 2x or 3x ETF plays on SK Hynix alone are quite worrying – there is a lot of money flowing in and out every day.
Principles of fund management
JM: Excellent – good start and it sets us up very well. Well, you mentioned all the fund managers you are talking to – what do you look for in an individual investment? And what would you consider a red flag?
JR: I tend to invest in funds over direct equities – and so it is managers’ processes that really are my ‘go-to’. So then a red flag would be something that is not repeatable. Or if they say they are doing something and then do something else – for example, if you have a philosophy of not buying banks and then suddenly you buy a bank, that would be a red flag.
It would not necessarily be an instant ‘sell’ – but it is something you would want to really go into and get under the bonnet with. But it is the process. Is it repeatable? Is it explainable both to us as investors and to our end-clients? So we really focus on having our principles of fund management – and then ask, Are managers aligned to that so that we can be aligned for our clients?
Noise and opportunity
JM: You mention being able to explain things to clients and talking to end-clients – how would you explain risk to someone who does not work in investment?
JR: It is a good question. There are lots of different definitions but, for me, risk is the possibility of permanent loss of capital. You know, an investment share price going down because of noise or market news, but still having good long-term earnings trajectories, is not risk – that is an opportunity to buy at a lower price.
If something has fundamentally changed, though, and there is a chance that things could go to zero, that is when there is risk. And so it is investing in highly valued companies – or indeed with lowly valued companies. The risk is the possibility of permanent loss of capital over the long term.
Catching the investment bug
JM: Thank you. A more personal question now – what was your path into investment and, if you had not taken it, in an alternative universe, what would you be doing now?
JR: I would be a doctor. I was a failed medic – in that I applied for Medicine at university and did not get in. I am not aggrieved but I did get better grades than all my medic friends! But that allowed me to have a gap year where I worked at Hargreaves Lansdown in Bristol – and that is where I caught the bug for investing. So I then did a degree in Economics – and here we are.
JM: Ah, I am trying to work in something like … you were just doing some work, caught the bug for investing and although you wanted to be a doctor, clearly you cured that … you have been through quarantine et cetera, et cetera! Nicely done.
Quality and growth
JM: So, having started life in Bristol at HL, what sort of investor do you think of yourself as now?
JR: A long-term, growth quality investor would be the way I think of myself. That has certainly evolved over time, seeing different ways of investing – and perhaps not understanding enough at Hargreaves – but then really getting into it in my previous firm at Tilney and now at Walker Crips. You must be quality over the long term, I think, because that is how we can compound returns over the long term and have a clear philosophy of repeatability.
Know what you are buying
JM: Similar sort of area, what is the biggest investment mistake you are prepared to admit to and, trying to make a positive out of it, what did you learn from it?
JR: My first investment mistake was while I was working at Hargreaves Lansdown and I took a tip from a friend – I can you tell it was for Petropavlovsk, which I thought was an oil company. I had not done the research but I put some money into it on my friend’s advice – and it turned out to be a Russian oil mining company that went into administration. So I lost all my money on that – thankfully, it was not a lot – but the key learning from it is: do your own research and know what you are buying.
JM: Absolutely. I like one I heard a couple of weeks back. I don’t know if you overlapped with Ben Yearsley at Hargreaves Landsdown but he told me: Never take a share tip from a fund manager as you will always regret it!
Rave reviews
JM: Now, outside of work – and this is everyone’s favourite question on Choice Words – what is the strangest thing you have ever seen or done?
JR: Well, it depends on the context of ‘strange’ but …
JM: OK … I will leave you to ‘internally censor’ – just remember this is a family show!
JR: I think probably it is that – while I don’t have the appearance of it – I did used to be a techno DJ at a nightclub called Timbuktu when at university.
JM: And where was that?
JR: Timbuktu was a nightclub in Bristol – and you would not expect that, I don’t think, looking at me. But I still like dance music.
JM: I guess I could ask what you saw there but, no – what happens on the dancefloor stays on the dancefloor!
It’s good to talk
JM: What is the best piece of advice you have ever been given?
JR: I think it applies both at work and personally – and it is from my old boss Charles MacKinnon at Tilney, who told me: ‘Pick up the phone’. That is super-important. Don’t email people – pick up the phone to them and speak to them. If it is in person, that is even better because that is how you build relationships. Be it internally – to help the business work together and grow or with building client relationships – or personally, it is much better if you can speak to someone.
We all prefer speaking to someone on the phone in a call-centre than we do through an email. We probably don’t enjoy the call-centres really but, if you can actually speak to a real person, it is so much better. So I always remember that – pick up the phone. Sometimes emails are good as a follow-up for further details – but have that initial call for sure.
JM: I completely agree. I have worked in companies – not Wealthwise Media, of course! – where the sales floor has been completely silent as they send their emails. And you are left thinking, Hang on, the journalists are making more noise – and sales are all sending emails to which I am sure people just go, No, or delete, no, delete … madness!
People power
JM: Well – you have received your good advice, let’s now give some – what qualities do you think drive a successful wealth management business?
JR: People – it has to be people. People who care, who are passionate about investing and about looking after clients and other people – and then who support each other. If you have good people, everything flows from that. Investment philosophy is clearly very important – and hopefully good returns – but clients care about trust and they care about relationships.
And so it is super-important – just to have good people who will help everyone work together. You might not be speaking to a client directly but, if you care, you will want to help the investment manager help the client. That is better for the company and it is better for the client. It is so important, your people – you must start with that.
JM: Yes, I am sure you are right. Well, I hope you are right – and I hope there are enough wealth managers out there who do continue to do that, at least until our robot overlords decide what happens next!
Succession plan
JM: Last question, then – we call these videos ‘Choice Words’ because of what you do for a living but now we are looking for two personal recommendations. One is a book – it can be investment-related, but it does not have to be – and the other one is a free hit. I will not even go through the list of stuff we have had over the last couple of years but it is a free choice for you – book first?
JR: Great. Well, I am dyslexic, so I am not a great book-reader outside of work, but my favourite is George Orwell’s 1984 – although a slightly leftfield option would be The Magus by John Fowles. That is quite an odd book – but, if you can get through it, it is interesting.
And then my second choice would be a TV show – Succession. I absolutely love Jesse Armstrong’s writing on Peep Show, on Fresh Meat and on Succession. We hope that is not really how it works in corporate America’s boardrooms! But I think it is a fantastic show to see the dynamics and I really enjoy it.
JM: Excellent – great ‘Choice Words’ choices, James. Thank you for that – and thank you, indeed, for this whole conversation. Lovely to meet you; lovely to speak to you.
JR: Thank you for having me.
JM: Our pleasure – and thank you very much for watching. Please do look out for further ‘Choice Words’ videos as and when they are published.
