Will the future of investments be data-driven?

Sponsored interview with George Cliff, CIO and Director of Research of Clever Investment Management

As the recent market turmoil has proven, you don’t need to be a behavioural science expert to know that people are emotional – and poor predictors of the future. This is particularly true, and particularly harmful, when it comes to investing. Our emotions can all too easily get in the way of making rational and logical decisions on our investments, and the investments of clients.

Humans tend to do everything the science and successful investors of the past say not to. Selling good funds too early, holding bad funds for too long and even more commonly holding good funds for so long that they turn bad – and then blaming the fund for not working in an environment it wasn’t built for. This is known as the ‘behavioural drag’ on performance and is a big driver for why active funds get such a bad rap.

Ahead of intelliflo innovate 2025, we caught up with George Cliff, CIO and Director of Research at Clever Investment Management to find out how his firm is helping advisers manage all of this, themselves, and deliver more consistent investment outcomes for clients.

George explains that “consistency in outcome is a result of consistency in approach, and an agnostic view on what investment styles to hold in a given period. All styles add value at different times, it’s a case of having a robust process to identify when that is, when to get in, and more importantly when to get out. This is easy to say, but difficult to do as an emotional human, so we have built systems to do it for us. Systems driven by data and objective analysis and built on decades of academic research”.

Advice firms face a constant battle to deliver consistent investment performance while navigating unpredictable markets, evolving regulation, and managing both their own and their clients’ emotions. For Clever Investment Management, the answer to these challenges lies in harnessing the power of technology and rules-based decision-making, void of human emotion.

“Good stories don’t always deliver good results, and the fund manager won’t be the one explaining to the client why it didn’t work 12 months later. Advisers and clients want peace of mind with a consistent, transparent process that does the work every month.”

Clever IM’s approach is a deliberate departure from the ‘celebrity fund manager’ model. Well-known investment managers can offer a compelling narrative to tell clients, but their performance doesn’t always measure up. George’s view is that: “It might be a great story to tell a client, but good stories don’t always deliver good results, and the fund manager won’t be the one explaining to the client why it didn’t work 12 months later. Advisers and clients want peace of mind with a consistent, transparent process that does the work every month. We wanted to put in place an investment approach where the rationale behind decisions is always objective and disciplined, to help advisers produce consistent outcomes for their clients that match their expectations and help them achieve their goals.”

Much of this peace of mind Clever Investment Management provides stems from something relatively simple – regular client communication. He explains, “We invest a great deal in research and the development of our investment systems, but ironically, the simplest part of the process – the monthly email – is what clients talk about the most. It reminds them that their adviser cares, someone’s watching, and the system is working.”

Far from replacing people in the advice process, a tech-led approach actually strengthens the adviser-client relationship, fostering trust and loyalty. George concludes, “The client’s relationship with the adviser is sacrosanct – that’s where all of the value is. We’re just here to support the adviser and help improve their service and the clients experience.”

To hear more about why humans make poor investors and how processes and technology can drive better investment outcomes, join George’s session at innovate 2025 on The problem with people.