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Præmium has teamed up with Old Broad Street Research to launch the first customer-agreed remuneration funds of funds in the UK.

The funds’ remuneration structure will allow clients invested in the same fund to agree different adviser remuneration, according to the level of service they receive, as well as the type of charges - commission or fees - they prefer.

Præmium said the range of five risk-based funds of funds - offered under Præmium’s SMARTfunds, which offers funds of funds, multi-manager funds and personalised lifestyle funds - would streamline the advisory process for IFAs.

This, according to John Martin, managing director at Præmium, will be of enormous benefit to financial advisers with respect to complying with Treating Customers Fairly.

The funds will automate all steps of the investment process by mapping clients’ risk profile using FinaMetrica profiling tools and applying an asset-allocation strategy designed by Barrie & Hibbert, followed by tactical investment selection by OBSR.

Because many advisers already use OBSR to construct model portfolios for clients, Præmium’s new range of funds will be able to take the offering a step further, Mr Martin said.

“These funds take this offering to the next level, enabling investor portfolios to be automatically updated as the asset allocation or investment selection models change. Furthermore, the authorised unit trust structure ensures investors will not incur capital gains liabilities as these adjustments are made.”

Mr Martin said Præmium had FSA authorisation for a fund that can apply different charges to each individual investor, allowing them to agree commission and fees with their adviser rather than being “dictated to by the fund management industry”.

Another benefit, he said, was full transparency of the underlying funds within each of the fund of fund models, giving investors an experience “more akin to a complete portfolio of funds”, rather than the single-line statement usually provided with fund of fund models.

Mr Martin said Præmium was in the process of making the funds available on several fund supermarket and wrap platforms, including Cofunds.