Stewardship Code


Stewardship by asset owners and asset managers involves making informed decisions about where to invest and proactive oversight of those assets once invested. These activities improve market quality and integrity, and help create sustainable, long term value for clients and beneficiaries. 

Effective stewardship is also expected to: 
•    lead to broad economic, environmental and societal benefits; 
•    ensure that markets function well;
•    support market integrity by improving the quality and effectiveness of capital allocation; and,  
•    deliver good outcomes for consumers by encouraging firms to actively seek value that meets consumers’ preferences. 

The UK Stewardship Code 2020 (‘the Code’) is published by The Financial Reporting Council (‘FRC’) and sets out good stewardship practice for asset managers, asset owners and service providers when engaging with investee companies. It comprises a set of twelve 'apply and explain' principles for asset managers managing and investing money on behalf of professional clients in the United Kingdom. 

There are six separate principles for service providers. Each principle is supported by reporting expectations which indicate the information which a signatory to the Code should include in its Stewardship Report.


Stewardship has been defined by the FRC as ‘the responsible allocation, management and oversight of capital to create long term value for clients and beneficiaries leading to sustainable benefits for the economy, the environment and society’.

Voluntary Code

Compliance with the code is voluntary and while Kleinwort Hambros is not a signatory to the Code, we support its aims and acknowledge the role that effective stewardship can play in promoting better or more sustainable economic, environmental and societal outcomes.

The Financial Conduct Authority (‘FCA’), by whom Kleinwort Hambros is regulated to undertake investment business in the United Kingdom, requires all firms that manage investments for professional clients to produce a statement of commitment to the Stewardship Code or explain why it is not appropriate.

Kleinwort Hambros Views In Relation To The Code

Kleinwort Hambros is a private wealth manager and investment manager and our clients are predominantly retail clients under the FCA rules. Retail clients are not covered by the terms of the Code. A small number of Kleinwort Hambros clients are classified as ‘professional clients’ under the rules and their portfolios are managed within the terms of our standard services.

The Code’s aim is to improve the way in which institutional investors interact with the management of companies in which they invest across all asset classes. Whilst we recognise our responsibilities that come with the stewardship of client assets, we do not believe that the purpose of the Code was to encourage firms like Kleinwort Hambros to routinely engage with the managements of our investee companies. 

Kleinwort Hambros’ approach to stewardship involves creating stronger client relationships based on trust, service and expert knowledge. As part of our investment strategy, we aim to deliver long-term sustainable value creation, in the best interests of our clients across all asset classes. When constructing investment portfolios for our clients, our investment managers consider a wide range of factors, including but not limited to: investment objectives; investment time horizon; risk appetite; capacity for loss and ethical concerns.

Kleinwort Hambros’ investment philosophy centres on three guiding principles:
1.    Get the big decisions right. Asset allocation is the most important decision and it should be actively managed.
2.    Take risk only when risk is likely to be well rewarded. When assets are expensive, risk is not well rewarded; when assets are cheap, it is. Valuation is the key driver of long-term returns.
3.    Avoid large losses. The pain of losing money is the ultimate definition of risk. Therefore, client portfolios are constructed in a way which will seek to withstand market stress scenarios.

From the exclusion of ‘sin stocks’ to the direct influence of impact funds, Kleinwort Hambros has adopted techniques spanning the spectrum of responsible investing principles to craft a holistic offering for our clients. While the bank provides a differentiated responsible investment proposition which incorporates the merits of ethical, ESG (Environmental, Social and Governance), sustainable and impact investing, such factors inform all portfolios and we expect to have no differentiation between “classic” and “responsible” strategies in due course.  In addition, Kleinwort Hambros is a signatory of the Principles for Responsible Investment (‘PRI’) and UK Sustainable Investment and Finance Association (‘UKSIF’). Both are widely recognised bodies for promoting responsible investing across the financial sector. 

Kleinwort Hambros takes all reasonable steps to treat clients fairly and requires all staff to comply with a Conflicts of Interest Policy (‘the Policy’), which obliges them to disregard any interest, relationship or arrangement that the firm may have in relation to the client’s transaction or investment. A summary of the Policy is available on the Kleinwort Hambros website. Any actual or potential conflict of interest that may arise is managed in accordance with the Policy.

August 2021



Kleinwort Hambros’ Engagement Policy can be accessed here.