FundsNetwork launches outsourcing service

The FundsNetwork Navigator service uses internally developed risk profiling techniques to gauge clients’ tolerance for risk. The system then recommends one of the three Multi Asset Allocator funds of funds that Fidelity launched in October 2011 for Trevor Greetham, which are called Defensive, Balanced and Growth.

This is the first time the FundsNetwork platform has offered advisers a proprietary ‘end-to-end’ way for them to outsource investment management.

The launch puts the group up against similar offerings from Skandia, which offers the Spectrum fund suite and risk-profiling tools, and Standard Life, which offers MyFolio.

David White, head of FundsNetwork, said the launch was the “final piece of the jigsaw” for the platform, which started hosting external model portfolios and discretionary fund managers last year.

The service is free to advisers who use the platform, and the underlying Allocator funds charge annual management fees of 1 per cent, or 0.5 per cent if advisers use the ‘clean fee’ share class that contains no rebate.

The Allocator funds are ‘unfettered’, meaning they can trade in non-Fidelity funds. They also solely invest in passive funds, making them a relatively cheap alternative.

“We are allowing advisers to come on to the platform who want to outsource, but not to a discretionary fund manager, and who want a ready made service,” said Mr White.

Paul Richards, head of sales at FundsNetwork, said the launch had been driven by demand.

“That was the driver rather than trying to compete with another offering,” he said. “But we have got what we think are real differentiations, including service, price and tactical asset allocation.”

Elsewhere in its multi-asset and multi-manager ranges, Fidelity last week also renamed its Retirement Income fund as Multi Asset Income and named Eugene Philalithis as a co-manager alongside Richard Skelt.