As the latest part of IFA Magazine’s recent series of articles looking at the 2020 Managed Portfolio Services Research from Compliance Consultant TC Compliance Services, this month we start to drill down and look at how the research tackles the important subject of data.
When it comes to managed portfolio services (MPS), their use by advisers, planners and paraplanners has been growing significantly in recent years. It is ideally positioned for those clients who need and want their investments managed by professionals but who do not have the size of investment that would warrant the bespoke approach of a discretionary management service. This is a large segment of the UK population and one which is well served by a large number of providers of MPS.
But therein lies the challenge for advisers and paraplanners. With so many different services available, how do you go about selecting which MPS is most appropriate for your particular client’s needs? How do you justify it terms of effective due diligence? The MPS Review is one way to access a huge amount of information in one place. It has almost 160 pages of analysis and data within this extremely competitive market.
Whilst it is still a snapshot of the overall market, it represents a thorough assessment of many of the leading providers of MPS in the UK today
What exactly does the review cover?
In previous articles, we’ve highlighted how the research covers areas as diverse as MiFID II and PROD rules, CIPs (Centralised Investment Propositions) and ESG (Environmental, Social and Governance) aspects. We’ve also looked at why the MPS might be appropriate and for which clients.
This month we’re looking at data. And there is plenty of it on the pages of the review as you would expect. The due diligence process necessarily requires adviser firms to conduct a thorough analysis of the detail and data is your way of doing it. To make life even more complicated, it is often the case that not only do you have to your research on the individual MPS offerings but also on platforms as often integration with this important aspect of business needs to be achieved.
POf course, a key element of the data set that all adviser firms need to compare is the charges. The MPS review looks in detail at this area, with ongoing charges, transaction costs and total charges highlighted for a large number of providers. It is clear that with every additional layer of management and oversight which is involved with the management of a client’s portfolio, advisers must be careful to ensure that the total cost to the client is considered and at an appropriate level which will not unnecessarily deplete returns.
In his research, Tony Catt has linked up with data providers to help achieve the summary picture. An example of this is shown in table 1 – which gives detail from Defaqto on funds labelled balanced or similar, as far as possible. It provides an interesting insight into how the different providers apply their charges and is an indication of the type of analysis which is available within the report.
IFA Magazine readers can purchase a copy of the MPS report by visiting www.IFAMagazine.com