In this Q&A, Nick Davis, Multi-Asset Distribution Lead at Vanguard UK, tells us about Vanguard’s recent expansion into the MPS market, with the launch of three portfolio ranges that offer exciting investment opportunities for advisers and their clients.
IFA Magazine: Vanguard has a strong multi-asset heritage – so does that mean it has been a natural expansion into MPS for you? What does this mean for advisers and their clients?
ND: Yes, MPS has absolutely been a natural evolution for us. Vanguard has been one of the world’s largest multi-asset providers for a very long time – our heritage goes back to 1976 when John Bogle founded the firm, and multi-asset was one of the first investment strategies we launched. Over the years our range and capabilities have expanded, including the LifeStrategy and SustainableLife fund ranges – all built on the principles of low cost, diversification and strong governance.
Vanguard’s expansion into MPS, starting with our LifeTarget range in 2021 and the launch of our LifeStrategy ranges in May this year, is primarily due to adviser feedback. We are one of the most used multi-asset managers in the UK and we’ve had huge amounts of feedback from advisers saying, “we like what you do, we support your business, but we would also like you to offer model portfolio solutions”. We have therefore responded to this – and are bringing Vanguard’s governance, oversight to the MPS market. We believe our tried and tested investment approaches really lend themselves to MPS – and that has certainly been adviser reaction so far.
IFA Magazine: How committed is Vanguard to building relationships with, and supporting the needs of, advisers and their clients? How does this work in practice?
ND: Financial advisers are at the heart of what we do at Vanguard. Working with like-minded intermediaries is our bread and butter, as has been the case since our UK launch back in 2009. Since then, over 4000 adviser firms have entrusted us with their clients’ assets.
In addition, we continue to invest in our adviser-facing people and resources to help grow and improve our proposition for advisers – and we will continue to do that going forward. In addition to providing investment solutions (such as the LifeStrategy franchise range), we also offer the Vanguard Adviser Advantage programme. This programme provides CPD webinar support and end-client friendly materials to help advisers with the following themes:
- Investment expertise
- Behavioural coaching
- The role of financial advice
- Dealing with clients during periods of economic and market uncertainty
The programme is built to go beyond just product – it’s designed to help advisers build successful businesses that are sustainable for the long-term and provide great value to their clients.
IFA Magazine: In today’s complicated world, how important do you believe it is for investors to seek sound professional financial advice?
ND: Vanguard is one of the greatest proponents of the need for financial advice in the industry. We believe that advice is essential. We carried out a piece of research called Adviser’s Alpha a few years ago that quantified the value advisers bring to clients. The results indicated that advisers can add around 300 basis points of additional value to clients each year. Much of this comes from the role
advisers play as a behavioural coach, ensuring their clients stick to their plan, whilst resisting the temptation to panic during times of economic or market uncertainty. This is ultimately why we have launched our LifeTarget and LifeStrategy model portfolio ranges – providing advisers with a preference for model portfolios a solution to help implement their clients’ financial plans.
The LifeTarget range of three solutions (defensive, cautious, moderate) is designed to help advisers build robust retirement propositions for their clients (e.g., Centralised Retirement Propositions). Furthermore, the LifeStrategy Model Portfolios consists of two ranges:
- Vanguard LifeStrategy MPS Classic
- Vanguard LifeStrategy MPS Global
These ranges have been created for advisers who are looking for a solution that resists the temptation to try and tactically time market rotations, instead relying on the power of strategic asset allocation, with the aim of delivering investors long term returns. In addition, the LifeStrategy ranges are within the lowest decile of cost for model portfolios in the UK, which we believe is extremely important in today’s challenging market conditions.
Finally, all of our model portfolio ranges are built around the Vanguard principles of investing that have served advisers so well for the 13 years that we have been in the UK – and since the 1970s in the US. Financial advice matters and we are delighted to be doubling down on our commitment to help the thousands of advisers continue to do what they do best – deliver value to investors.
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Nick Davis, Multi-Asset Distribution Lead, Vanguard UK
Nick Davis is responsible for Vanguard’s UK multi-asset distribution strategy and client proposition across the UK. Prior to this role, Nick was a consultant relations director in the UK institutional team and before that was responsible for Vanguard’s relationships in the wealth manager channel.
Nick began his career at Hargreaves Lansdown, before joining Investec Asset Management’s global bank division. Nick has been at Vanguard since 2012.
Nick is holds a BCom from the Birmingham University and is an Investment Management Certificate holder.