Montage Portfolio Management is the latest name to announce a discretionary fund management service. The offering from Chelmsford-based adviser firm Montage Wealth Management will roll out to the wider market in October.
The range features 11 risk-rated portfolios, numbered as 0, 10, 20 and so on up to 100 and risk-rated by Finametrica. Each number labelling the portfolio is determined by the exposure to growth assets (equities and alternatives).
For example the MPM000 is entirely split between fixed interest (72 per cent) and cash (28 per cent) with no growth exposure, while at the other end of the spectrum, the MPM100 is invested in 85 per cent equities, 13 per cent alternatives and just 2 per cent in cash.
Each portfolio will only use funds which are priced daily.
Advisers using the service will get access to a risk-profiling pack to determine which portfolio best suits their clients according to investors’ risk tolerance, risk capacity and risk required to meet planning goals.
All portfolios have an underlying management charge of 0.3 per cent and an ongoing charges figure (OCF) ranging from 0.29 per cent for the most cautious portfolio up to 0.84 per cent for the riskiest.
There are no exit or transfer fees.The portfolios are available through the 7IM platform but Montage is in talks with three further platforms.
Comment:
Montage is undeniably late to the party with this proposition. There was a flurry of activity among DFMs - new and established - in the build up to RDR.
Just about every adviser firm that wants a relationship with a DFM will have one by now so Montage will have to offer something sufficiently more attractive, if it is to prise some advisers away from their still nascent relationships.
Managing director Peter Montague believes the current level of satisfaction with existing DFMs is poor. And his background within a wealth management firm should make him well qualified to judge that.
A key selling point could be the simple risk-rating system, which should make the it easier for the end investor to understand. This should engage clients more than some arbitrary risk rating systems that do exist.
However, while more straightforward, it does add another risk metric system into a market
