Peter Montague, managing director and portfolio manager of Montage Portfolio Management, said those who “don’t like what they see” in the outsourced discretionary management space are starting to look for ways to do it themselves, but they do not always have the investment know-how or the underlying technology to provide such a service.
However, he said a “lightbulb” moment at the firm five years ago changed all that when they wanted to add an internal DFM service, but could not find anything that would help his wealthier clients.
This resulted in the firm teaming up with FinaMetrica to create 11 risk-rated portfolios, combining active and passive funds, with low annual management charges and underlying OCFs ranging between 0.29 per cent and 0.84 per cent a year.
He said the service is currently being rolled out to other advisory firms who want to keep control over the client relationship. Advisers can do high-end financial planning using the software underpinning the portfolio service, and the service can be white-labelled to allow personalised branding. He said: “There will be strict agreements in place so there will be no cross-selling.”
Industry view
Brian Spence, managing partner of London-based national firm Harrison Spence Partnership, said: “Historically, IFAs have felt more like pawns in the game than key players. Insurance companies have called the tune. But roles are reversing post-RDR and I think that’s a breath of fresh air for IFAs. This DFM initiative reflects the trend.”
