Thurleigh launches inaugural IFA offering

The London-based discretionary wealth manager has finalised plans to list the portfolios on Novia, which are available to IFAs from today.

The portfolios will carry a 0.3 per cent charge from Thurleigh, plus an additional platform fee, which ranges from 0.15 to 0.5 per cent depending on the size of the fund, and a minimum investment of £1,000.

The risk-rated models will include a very low risk portfolio which holds a minimum of 75 per cent in cash and bonds, 15 per cent in equities and 5 per cent in absolute return funds and a low risk model which targets 6 per cent volatility annually and hold 50 per cent in bonds, 10 per cent in cash, 30 per cent in equity and 10 per cent in absolute return funds.

The medium risk strategy will be benchmarked against cash and target “positive absolute returns” over a three year period. The portfolio will target 8 per cent volatility while holding 40 per cent in cash and bonds, 35 per cent in equity, 10 per cent in absolute return and an optional 5 per cent in private equity.

Thurleigh’s high risk offering targets capital growth at 12 per cent volatility. The model will hold 80 per cent in “risk assets”, such as property, equities, commodities, private equity and absolute return funds.

David Rosier, chairman of Thurleigh, said the group was considering launching a model version of its bespoke equity risk portfolio if volatility in markets became more subdued.

However, Mr Rosier warned that assessing the suitability of clients for particular investments was a “key part” of model portfolio and discretionary management and said appropriate due diligence on a higher risk fund would be “very difficult to do if suitability work was being done by a third party”. He stressed the responsibility for assessing clients’ appetite for risk remained with the IFA.

Chris Richards, portfolio manager at Thurleigh, said: “We have an agreement [with Novia] to provide what we advertise - which is to stick to the asset allocation and volatility.

“There’s a big thing about who’s liable and we want to make it clear and easy for IFAs and clients to understand, but we can’t physically have control over client suitability.”

He added the move to the platform was necessary for private client managers to keep up with changing trends in the investment industry.

“You’ve got to move with the times,” he said. “There are a lot of changes and new ways of doing things out there.”

Charles MacKinnon, chief investment officer at Thurleigh, said he had seen a “huge shift” in the market toward the use of discretionary managers.

“We believe that, partly due to the changes that will be forced on the industry in 2013 by RDR, there will be a growing demand for our services from the IFA community,” he said.

“At a time when the appropriateness of risk is under scrutiny, the clarity and transparence of our strategies should help IFAs to explain to their clients what risk/return profile to expect.”