For today’s discerning financial and investment professional
ANNUAL REPORTS
MANAGED PORTFOLIO SERVICES RESEARCH
By Tony Catt Compliance Consultant | TC Compliance Services This report is suitable for professional advisers only and not for retail investors.
Managed Portfolio Services Due Diligence Research
Contents Acknowledgements and Thanks
6
Introduction
7
Is now the right time to be outsourcing?
8
MiFID II & PROD rules
10
Distribution of products and investment services
10
Obtaining information from manufacturers
10
Centralised Investment Proposition (CIP)
10
Ensuring a recommendation to switch existing investments into the CIP is suitable
11
Client Segmentation
11
Suitability
11
Advisers
12
Controls and oversight
12
Identifying and managing conflicts of interest
12
Management information
12
Agent as client
13
Reliance on Others
13
Agents as Client or Reliance on Others – how do advisers choose?
13
VAT and MPS
14
Historic Performance of Asset Classes
15
Environmental, Social and Governance (ESG) Investment
16
Managed Portfolio Services
17
MPS on platforms
18
MPS Charging Structures
19
Defaqto Data comparisons
25
AKG DFM Financial Strength Ratings
27
Defaqto DFM Service Ratings 2020
28
Defaqto Risk Focused Fund Families – Diamond Ratings
29
Defaqto Risk Targeted Fund Families – Diamond Ratings
30
Synaptic Risk Rating Service
31
DFM/MPS Press coverage
44
MPS in the UK
45
Clever Adviser
45
8AM GLOBAL
47
Aberdeen Standard Capital
48
AJ Bell
50
Beaufort Investment Management
51
Blankstone Sington
55
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Managed Portfolio Services Due Diligence Research
Brewin Dolphin
57
Brooks Macdonald
58
Canaccord Genuity Wealth Management
61
Cazenove Capital
63
Charles Stanley
65
City Asset Management
67
Close Brothers Asset Management
68
Copia Capital Management
69
Cornelian Asset Managers
72
DB Wood
73
EBI Portfolios
75
EQ Investors
77
FE Investments
79
GAM
80
Garraway
81
Hawksmoor Investment Management
82
HSBC Global Asset Management
84
IBOSS
86
Invesco
87
JM Finn
90
Jupiter
92
King & Shaxson
93
LGT Vestra Wealth
95
Liontrust
97
Momentum
99
Morningstar
100
Newscape Capital Group
102
Ninety One
103
OCM Wealth Management
104
Octopus Investments
105
Old Mutual Wealth
106
PortfolioMetrix
107
Premier Miton
109
Psigma Investment Management
111
Quilter Cheviot
113
Rathbones
117
Rowan Dartington
119
Royal London Asset Management
120
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Managed Portfolio Services Due Diligence Research
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Sanlam
121
Sarasin & Partners
124
Scottish Widows
126
7IM
128
Smith & Williamson
132
Sparrows Capital
134
Tatton Investment Management
135
Tilney for Professionals
138
Tribe Impact Capital
140
Walker Crips
142
Waverton Investment Management
143
Wellian Investment Solutions
145
Whitechurch Securities
147
Glossary
149
Disclaimer
158
Managed Portfolio Services Due Diligence Research
Acknowledgements and Thanks I would like to acknowledge all the people who have provided information to enable me to produce this report. Thank you to AKG for providing the up to date DGM Financial Strength Ratings figures. A special thank you to those individuals who spent time speaking with me and also sending through information that is included in this report. 8AM Global/Clever Adviser Aberdeen Standard Capital AJ Bell AKG Beaufort Investments Blankstone Sington Brooks Macdonald Canaccord Genuity Cazenove Charles Stanley Charles Stanley City Asset Management Close Brothers AM Close Brothers Copia Capital Copia Capital Cornelian EBI EQ Investors FE Investments Garraway Hawksmoor HSBC Invesco JM Finn King & Shaxson Morningstar Newscape Capital Group OMW PortfoloMetrix Psigma Psigma Quilter Cheviot Rathbones Rowan Dartington Royal London Sanlam Sarasin Seven IM Smith & Williamson Sparrows Capital Tatton IM Tilney Tribe Impact Capital Walker Crips Waverton Whitechurch Securities
Ash Weston James England Dharmesh Mistry Matt Ward Shane Balkham Neil Blankstone Richard Kelly Sean Taylor Daniel Curtis Jeremy Hippolite Matthew Keen Chris Gillam David Sells Sebastian Ladimeji Tony Hicks Keith Furniss Kevin Sturla Ashley Owen Damian Lardoux Josh Pedlar Yannis Katsis Jill Gill Joe Rowell UK Distribution team Luke Powell Peter Thompson Chris French Daniel Mermina William Bell Dave Chessell Stewart Howard Mike Myers Brian Donald Arron Silk Chris Baker Robert Horsburgh Sales Support Team Zoe Cossins Simon Church Matthew Finch John Bennett Justine Randall Andrew Tompson Christopher Toy Rachel Blythe Mark Barrington Phil Miller
ash.weston@8amglobal.com james.england@aberdeenstandard.com Dharmesh.mistry@ajbell.co.uk matt.ward@AKG.co.uk shane.balkham@beaufortgroup.co.uk n.blankstone@blankstonesington.co.uk Richard.kelly@brooksmacdonald.com sean.taylor@canaccord.com daniel.curtis@cazenovecapital.com jeremy.hippolite@charles-stanley.co.uk matthew.keen@charles-stanley.co.uk Chris.Gillam@city-asset.co.uk dsells@teamspirit.uk.com Sebastian.ladimeji@closebrothers.com tony.hicks@copia.capital.co.uk keith.furniss@copia-capital.co.uk kevin-sturla@cornelianam.com ashley.owen@ebip.co.uk Damien.lardoux@eqinvestors.co.uk josh.pedlar@fefundinfo.com Yannis.katsis@garrawaycm.com jill.gill@hawksmoorim.co.uk joe.rowell@hsbc.com salesadmin@invesco.com luke.powell@jmfinn.com peter.thompson@kasl.co.uk chris.french@morningstar.com d.mermina@newscapegroup.com William.bell@omwealth.com dave.chessell@portfoliometrix.co.uk stewart.howard@psigma.com mike.myers@psigma.com Platforms@quiltercheviot.com arron.silk@rathbones.com client.services@rowan-dartington.co.uk Robert.Horsburgh@rlisales.com salessupport@sanlam.co.uk zoe.cossins@sarasin.co.uk simon.church@7im.co.uk matthew.finch@smithandwilliamson.com john.bennett@sparrowscapital.com justine.randall@tattonim.com andrew.tompson@tilney.co.uk christophert@tribeimpactcapital.com Rachel.blythe@wcgplc.co.uk mbarrington@waverton.co.uk phil.miller@whitechurch.co.uk
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Managed Portfolio Services Due Diligence Research
Introduction I work as an independent compliance consultant working mainly with IFA firms around London and the South-East. I have several firms for whom I undertake different duties. I have previously undertaken platform research and distributed it among my client firms. One of the firms asked me to undertake research on MPS as they had been running their own portfolios and were looking to move to a thirdparty arrangement. I looked around the market for reports and found Defaqto, the Langcat and Next Wealth reports. The first two were commissioned by OMW WealthSelect and unsurprisingly focussed on that. When I looked at the reports, they had a core of MPS providers but they each had some that did not appear on the other reports. I went onto FE Analytics where I found a lot more. But none of them had as much detail as I wanted or breadth of providers. So, I thought that I would just have to do it myself. This research is to show the Managed Portfolio Services that are currently available for Independent Financial Advisers to use for their clients’ investment strategies. There are many providers in the market offering Managed (Model) Portfolio Services (MPS). It is an extremely competitive market. Many Discretionary Fund Managers (DFM) offer managed portfolios for investors who want their money managed professionally, but do not have the size of investment that would warrant the expense of a bespoke discretionary fund management service, which is used for High Net Worth (HNW) investors.. Rather than miss out on the Mass Affluent (MA) market of people who want to invest, but not the same magnitude, the Managed Portfolio Services have been introduced. I am looking to provide information on a wider range of providers to show how any Managed Portfolio Service chosen by a firm is competitive in the market and why it may be chosen to suit the clients of the advising firm. If there are errors in this report, please advise me and I will correct them. The more I looked into the MPS, the more I realised that there are a lot of very good practitioners in the field. All apparently with their own views on investment and how much better they were than their competitors. This report can only be considered to be a snapshot of the market in July 2020. Whilst I have a wider range of providers than any other report that I have seen on MPS providers, there are still a lot of providers that are not in this report, simply due to the numbers available. If there are any providers that you would like included in future editions of this report, please advise me. It just proves that there is an investment strategy to suit every investor. They just need to be discovered and identified. With all these managed portfolio services providers available, it is a mystery why any financial planning firm would want to devote so much of their valuable time running their own portfolios.
Tony Catt Tony Catt Compliance Consultant TC Compliance Services Mobile: 07899 847338 Email: info@tonycatt.co.uk
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