George Higginson is well known in the financial advice industry for being the chief executive of Sesame Bankhall for several years, and before that a founding director of Intrinsic.
After taking some time out from the financial advice sector, he is back with a new venture, a discretionary fund manager called Alpha Beta Partners that aims to offer steady returns, avoiding the extremes of too much or too little risk.
Using his clout in the financial services industry, he has negotiated positions on the major platforms, and is hoping that advisers will come knocking, attracted by the low charges and calibre of the investment team.
He says: “We’re not saying ours is the only game in town, but if you’re going to do it yourself, you have to do it right.
“There are a lot advisers out there who don’t want to be in a network but who don’t necessarily have the scale to build a portfolio themselves. There was a demand from the IFA market, especially with Mifid, and the increase in regulatory demands.
“It’s more complex for them to do that, and the oversight they have to have and the checking they have to do.”
Many advisers do not have the capacity to build portfolios themselves, but want to offer a proper service to clients. Mr Higginson’s company, where he is chief executive, offers a range of portfolios on the Distribution Technology risk profiles of three to eight.
“The first set of portfolios are passive portfolios and it is active overlay on top of it. There are also blended portfolios with 80 per cent passive and 20 per cent active.”
The funds, called Alphabeta, are availableon Aviva, Aegon Standard Life, Fundmentand Zurich.
“With our connections in the platform world we’ve managed to get onto the major platforms. Many of the platforms will put you on board, because we’ve done this before with Cirilium [now owned by Quilter Investors]; we’re one of the only DFMs on this scale who’s on these major platforms.
“What you tend to find is that the market at one extreme is passive only and very cheap, and at the other extreme is very fully DFM and very expensive. If you want good, not expensive solutions with passive investments but active overlay, it costs 5 to 7 basis points more than pure passive.”
Alpha Beta Partners’ passive portfolios cost 34 to 39bp, while the blended portfolios of 80 per cent passive and 20 per cent active are 44 to 49bp.
“It’s very different to fund management that has a certain amount of scale to make it reasonable for the client – we’re less restricted by that because we’re a model portfolio service, but we have to look at certain scale or the business model doesn’t work. There’s a certain level we’d like to get to.”