Evelyn Partners was born out of the merger between Tilney and Smith & Williamson, how has this benefitted your clients?
We manage around £54.9bn of client assets and this size and scale brings with it a number of advantages. We have had the opportunity to redefine our product range to take into consideration our IFA clients and the changing regulatory needs, specifically Consumer Duty. For our IFA clients we focus on doing 3 things really well; we offer a bespoke portfolio service, an AIM service, and a range of three model portfolio services (MPSs) across 14 different platforms.
Before the merger both Tilney and Smith & Williamson had substantial research teams and MPS resources, combined, it has enabled us to grow our MPS offerings. We appreciate that advisers prefer housing assets on platforms and the combined entity of Evelyn Partners can now provide a larger range of options and choices for IFAs on this medium. The three MPSs we have built on platform – Core, Active and Sustainable – consist of growth models and income models.
The Core MPS range is a blend of active and passive investments across 7 growth models and 2 income models.
Our Active MPS range, which consists of 6 models, was launched in 2012 and the team managing the MPS is the same since launch. The Active MPS invests in a range of open-ended funds, investment companies and passives.
The Sustainable MPS consists of 6 models, all of which have a clear mandate for what the managers will invest in, and what they are looking to avoid. Launched 11 years ago, the Sustainable service has one of the longest track records in the MPS industry.
Since the merger, MPS costs across the range have been significantly reduced. Annual management costs have fallen to 0.2% for our Core and Sustainable ranges and 0.25% for the Active range. In addition to lower annual management costs, underlying fund costs have also been reduced, one reason for this has been negotiating more favourable terms with the funds we invest in.
What’s the difference between the Core MPS and Active MPS range?
The Core MPS range is a blend of active and passive investments. There is a focus on cost minimisation resulting in the Core MPS range to be our most cost-effective solution. The annual management charge is 0.2% and underlying fund charges are capped at 0.5% but are currently around 0.4%. For end clients, fee minimisation has been through a combination of reduced margins, use of passive instruments and using our size to negotiate with external fund managers.
The Active MPS range blends open-ended funds, passives and investment companies. Few MPS include investment companies but we feel strongly that in areas such as property, our experience in using closed-ended vehicles offers a distinct advantage. We do not have a preference for investment companies over open-ended funds or passives, we are just wanting to use the best tool for the job.
What differentiates the sustainable range from others in the market?
Our Sustainable MPS has an 11-year track record, which we feel sets us apart from other products in the market. It’s run by a team of people who feel very strongly that the theme of sustainability is becoming a part of everyday conversation. People want to know what their carbon footprint is, or what their plastic wastage is. This product clearly sets out what we’re trying to avoid – areas such as tobacco, gambling, and pornography – but also focuses on areas that can make a difference to the future – things like sustainable transport, infrastructure and housing.
Experience is very important in this area because sustainability is not always clear cut. Even among the United Nations 17 Sustainable Development Goals, by working towards one you can be detrimental to another, so an experienced team is vital because it’s important to understand the balance. You must think about every piece of the puzzle.