Bhutan nestles among the foothills of the Himalayas. It is a small hereditary monarchy bounded by the north-east arm of India, and the southern edge of the Tibetan Plateau and China. They say you can see both Everest and Makalu from certain vantage points. Trekkers have discovered its beauty. They seem content to pay several hundred dollars as an entrance fee to cover accommodation and other services during their stay. Trekkers aside, Bhutan has acquired another, perhaps more profound mark of distinction. In 1972 the king defined the primary goal of his government as “Gross National Happiness”. In support of that goal the government referenced four pillar factors. These include environmental conservation and preservation of the national culture. 

A number of countries (including the UK) acknowledge the worth of non-economic factors to people’s wellbeing and many try to measure their scale. None, however, yet appear to have identified national happiness as their central criterion of government success.

Hard economic factors for the world’s poorest must tragically remain their paramount concern. For those scrabbling in the dust of an arid and deadened landscape, little matters beyond the next meal and sheer survival. At the other extreme a Purdue University study (USA) provides evidence that above a certain relatively comfortable income level around £75,000, greater wealth contributes little or nothing to people’s happiness. 

We were drawn to Bhutan because its national goal mirrors our firm’s. Its ultimate purpose lays at least as much stress on people’s satisfaction and emotional wellbeing as on the hard socio-economic factors, vital though these are. Of itself money provides only the route to another destination. Some years ago a widely and justly acclaimed City editor, reflecting on a rich treasury of global travel, concluded that the view from a remote and unfrequented family property was an asset more precious than any so far acquired. It was intangible, it was priceless.

Pre-Covid, incomes for many in the UK and USA were the highest they had ever been. However, it is hard to sense any corresponding feeling of contentment, least of all among those left behind, in our currently fractured and resentful societies. By contrast Bhutan is an impoverished nation with national income per head only one tenth that of Denmark. Yet on one analysis of national wellbeing some years ago it came seventh in the global league of 157 nations. More recent tabulations use varying criteria to establish Bhutan’s position but it still appears to stand respectably high despite relative financial poverty.

Perhaps we all should turn economic priorities on their head and suppose that when people derive an increasing satisfaction with their lives, that will spill over into higher productivity and higher national income. Doctors consider a patient’s emotional strength to be a strong if immeasurable contributor to the speed of recovery.

At a purely domestic level that understanding lies behind the way we work with our own people. From the beginning we adopted a holistic approach. The result has been a happy atmosphere within our workplace evidenced by a strikingly low staff turnover. Staff contentment in turn seems to have contributed much to the satisfaction of our clients, in their case evidenced by enduring loyalty to the firm. These factors have underpinned our own growth. Even so, we are alert to the danger of complacency and are always glad to hear of any service improvements clients wish to suggest.

But reprioritising cause and effect raises a vital question for the whole investment management profession. How could you measure the degree of clients’ satisfaction without reference to hard numbers and a numerical comparison of monetary gains achieved?

Short of a direct survey, it cannot be done. States of the mind are not accessible by numeric comparison. That is not to say they don’t matter. But they are literally immeasurable. Appeal to the science of the mind and the assessment of personal metaphysical states sounds like airy-fairy fantasy. Nevertheless the consequences of clients’ appreciation or dissatisfaction – their happiness if you like – will determine every firm’s ultimate destiny. The most valuable asset of most investment management firms is their goodwill. That word embodies what clients feel about them. In the current hurly-burly roundabout of the sale and acquisition of investment management firms, most of what is being traded is the ‘goodwill’ of clients. If goodwill disappears a firm is virtually worthless. What is immeasurable matters after all.

Within the investment management industry interest in businesses’ ethical concerns and the discharge of their environmental and social responsibilities has risen hugely. This can only be beneficial to the protection of the planet and its people. It also breaks new ground in that it involves the application of quantitative measurement in areas previously regarded as being beyond its scope.

As custodians of our clients’ funds, we strive to achieve what they themselves tell us is their goal. How we organise their financial affairs is always designed to achieve their stated objective. Commonly that is defined solely in financial terms, typically the preservation and, over time, growth of their capital in real terms. Over the years we have generally managed to surpass that objective. But if one seeks to calculate the worth of an investment manager there is only one measurement that matters. That is the verdict of the client. That verdict often seems to involve not only finite factors but also wider assessments of the service overall. 

One senses here a disconnect between relative wealth levels and associated contentment. Philosophers over the centuries have been aware of the social and economic profits and pitfalls inherent in money-making for its own sake. For many (including Plato and Aristotle) money is best considered as a means to an end. This thought underlies our investment work. Intangible though that ultimate end may be we try our best to provide for it. That is a long-term and trustbuilding endeavour. 

All this may sound prosaic and little more than virtue signalling. However, it has evolved from a recognition that monetary gains are only part of a client’s purpose. Intangible factors appear to matter as much to many clients as the tangible ones.

That is not to ignore the necessity for technical competence. However, it is something that should always be presumed not claimed. Lawyers, for example, are required to possess qualifications appropriate to their profession. These days all investment managers have to be formally qualified. But our people understand that their most valuable attribute beyond mere technical competence is their ability to inspire trust among the firm’s clients. It is an immeasurable state of mind yet it shapes a context that nourishes contentment.

From a client’s point of view a strong value-added factor is the feeling of being personally served, a sense that they truly matter as individuals whatever their circumstances. As a guiding light we try to establish how we would wish to be treated ourselves in a given client’s circumstances and follow where that leads. That discipline also builds trust and thereby goodwill. It is the goodwill of the firm’s clients which underpins our own prosperity. Their contentment, and our staff’s conviction that they are doing something worthwhile, brings all of us its own reward.

If the nations of the world were to take a closer look at Bhutan they might not find a boundless sea of happy faces. Bhutan is a very poor country and there is a lot that needs to be improved. And you cannot tell what life would have been like without the goal of Gross National Happiness.

What sort of a gain do you derive from revaluing happiness as the ultimate goal for our clients and for ourselves? Its achievement is evidenced by trustful and enduring relationships, not by numbers.

Friends may remember their children’s and grandchildren’s school days. Children used to sing a charming little chorus which ran “If you’re happy and you know it clap your hands.” History does not relate whether the children in Bhutan clap their hands a lot. Contentment is a state of mind and happiness expresses itself in many ways. Sometimes our clients send us nice letters. These are of course greatly appreciated. You don’t have to be a child to join a happy chorus.

As for us, contentment can reside only in the confidence that we are travelling on the right path doing something worth doing for its own sake. If others are happy in the result then so are we. That’s pleasure enough.

14th May 2021