IFA Magazine’s live MPS webinars are always a popular choice with our adviser audience. The latest one, which took place in November, was no exception. With the considerable challenges and opportunities which exist within MPS, here we bring you a few snippets from the conversation plus an invitation to download the recording to hear it for yourself. The webinar was chaired by ARC’s Chris Curtis and featured MPS experts Alex Funk from Schroders and Ben Gilbert of Sarasin & Partners.
The use of Managed Portfolio Services (MPS) is proving to be an increasingly popular choice for many advisers and their clients.
So why is that? MPS solutions are attracting advisers’ attention for many reasons. In particular, diversification and cost are key. MPS and accessible model portfolios will appeal where advisers are looking to achieve the benefits of a diversified portfolio to meet their clients’ objectives which potentially can also benefit from lower costs than clients might face with a fully individual discretionary managed portfolio. MPS offers strong attraction for use with those clients who may not have significant sums to invest yet still require the full portfolio service which falls well in line with their risk and volatility tolerances.
These were just some of the themes under the microscope at IFA Magazine’s webinar held in November, entitled “MPS: an investment strategy to suit every investor’s needs”. Of course, if you missed the event first time around, use the link at the end of this article to catch up on the detail of the conversation for yourself.
What was clear was that there is a huge range of MPS strategies available in today’s market. As a result, advisers’ decisions on which provider’s MPS to ultimately select to meet their clients’ needs can be a daunting proposition.
Leading the MPS webinar discussion was Chris Curtis, Community Development Manager at Asset Risk Consultants (ARC). Chris was joined by MPS experts Alex Funk (Chief Investment Officer at Schroders) and Ben Gilbert (Senior Associate partner at Sarasin & Partners). Not only did Ben and Alex share details of their own approaches to MPS but also the concept of model portfolios more broadly and the complexities involved. That meant that there were also plenty of practical tips for advisers looking to carry out MPS due diligence.
The challenge of volatile market conditions
The volatility of today’s market conditions was certainly a pivotal discussion. The versatility and success of MPS portfolios was evaluated within this environment as Chris questioned both Ben and Alex on the difficulties that this period has created as well as the opportunities that have arisen.
The conversation highlighted how navigating an MPS through such volatile market conditions as we’ve witnessed throughout 2022, means that managers have had difficult decisions to make.
It also highlighted how investors’ as well as advisers’ due diligence has had to be more thorough than ever.
Advisers need to be sure that they assess, understand and document the relevant facts and features of a DFM’s portfolios. Not only must they fully understand asset managers’ current positioning and underlying asset allocation strategy, but also the instrument strategy and broader investment strategy being followed. By doing so, advisers will understand how these key factors are likely to impact on performance and thereby affect the returns – and volatility – which clients are likely to experience.
Ben and Alex both highlighted how their MPS portfolios have adapted to the economic climate and provided examples on how they have maintained their success despite the challenges they’ve faced – including how they’ve managed cash balances.
A variety of other topics were discussed during the webinar, including how MPS approaches navigate their way through inflationary periods we see in today’s economic climate, with the discussion around alternative assets being particularly relevant.
The fall-out in the value of fixed income assets during 2022 has also certainly been notable. It has led to considerable challenges for the traditional 60/40 portfolio and the discussion showed how managers have had to change/adapt accordingly and manage duration strategies appropriately.
Do all MPS providers sound the same?
The panel discussed key elements advisers should be looking for when selecting or reviewing MPS portfolios for their clients. In reality, although it’s sometimes easy to think they’re all rather similar, Ben and Alex articulated how and why there is a world of difference between the huge range of MPS solutions offered by providers across the market whose approaches – and therefore the end product – can vary dramatically.
When it comes to the kind of questions advisers should be asking MPS providers in order to be comfortable in selecting them for their CIP, the panel also offered practical insight about process, philosophy, the experience and skills of the underlying teams/ committees involved etc. The provider’s operational side is also important, with platform access and different formats becoming increasingly relevant.
IFA Magazine wishes to extend our thanks to Chris, Alex and Ben for sharing their time and expertise with us during the webinar. The feedback from attendees was strongly positive, indicating that not only did the discussion and content cover the right ground but also achieved the level of detail and scrutiny which IFA Magazine’s adviser audience have come to expect.
IFA Magazine’s MPS webinar followed hard on the heels of the publication of our 2022/3 MPS Report which you can access here.
This is the third in our series of reports revisiting the world of Managed Portfolio Services. It looks to provide advisers with sufficient knowledge and confidence to investigate the whole market of MPS providers.
Researched and written by leading Compliance Consultant, Tony Catt, the report provides one of the widest single-source publications on MPS research in the sector today.
About Ben Gilbert, Senior Associate Partner and Model Portfolio Manager at Sarasin
Ben is primarily responsible for managing portfolios on behalf of UK private clients and Professional Intermediaries. Prior to joining Sarasin in January 2019, Ben was a Director at Tilney, where he worked with private clients as well as sitting on the Asset Allocation and Fund Selection committees.
Ben attended University College London and has a FirstClass Honours degree in History & Philosophy of Sciences. He has passed the Chartered Institute for Securities and Investments (CISI) Masters in Wealth Management, Private Client Investment Advice & Management qualification (PCIAM) and CFA Level 1. Ben is also a Chartered Fellow of the CISI.
About Alex Funk, Chief Investment Officer at Schroders
Alex has many years of financial services experience which ranges from discretionary fund management, corporate finance, banking, capital raising, private equity to venture capital. Alex started managing a discretionary fund management business in South Africa and Mauritius, where he designed and managed model portfolios for financial advisers and wealth management firms across the world. Alex has extensive experience in managing multi-asset portfolios in the UK and is responsible for a range of portfolios and funds.
Alex holds a Bcom Honours in Financial Analysis (Cum Laude) from the University of Stellenbosch, South Africa and is a CFA Charterholder.