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1825 imposes portfolio cap on Standard Life funds

1825 imposes portfolio cap on Standard Life funds

Standard Life’s restricted financial advice arm 1825 has imposed a limit on how much of clients’ cash can be allocated to funds managed by Standard Life Investments.

Standard Life has confirmed the financial planning business has a 30 per cent cap on the proportion of assets which can be invested in SLI funds.

This comes after the company’s chief executive Steve Murray disputed whether 1825’s restricted status meant its advisers were shoving clients’ money in unsuitable products.

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Vertically integrated firms have been mired in criticism, as some industry figures have suggested the battle by asset managers to buy out advice firms means restricted advisers might crowd out the independents.

Earlier this year, advisers warned the rise of vertically integrated businesses will cause a deterioration in customer care, as fund groups put their profit before fair treatment of clients.

The 1825 managed portfolios, which form a core part of the company’s centralised investment proposition, were launched in 2015.

Speaking to FTAdviser, Mr Murray said the portfolios invest in a wide range of funds from across the market, including those managed by Standard Life Investments.

He said: “When we launched the portfolios we set investment guidelines covering a wide range of factors, including limits on fund manager exposure.

“In addition to the core 1825 portfolios, there are a range of other investment options available where client goals and circumstances require a different approach or portfolio structure, whether that be multi-asset funds, a tailored DFM portfolio or single asset fund holdings.”

Standard Life has recently been pursuing an aggressive adviser acquisition strategy after purchasing independent firms Baigrie Davies, Almary Green and Munro Partnership.

katherine.denham@ft.com