Online wealth manager Netwealth has launched a managed portfolio service which will allow financial advisers to access its investment proposition for the first time.
The service, available through the Transact platform, will give advisers and their clients access to seven risk-return portfolios, with strategic allocations to currencies and passive instruments including ETFs. To help reduce market risk, the MPS will also adopt cyclical positions.
An investment team will monitor portfolio allocation and performance daily, allowing portfolio weights to ‘drift’ with the difference in performance across investment instruments.
Each rebalance will be implemented as soon as a decision is made or a necessary adjustment identified, the company added, to help ensure client portfolios are optimised.
Charges include a discretionary fund management fee of 0.2 per cent plus VAT, and estimated fund costs of 0.24 per cent.
Sophie Austen, head of intermediary business development at Netwealth, said: “Netwealth’s Managed Portfolio Service offers financial advisers something truly different, standing apart from the traditional services currently on the market.
"We are offering the latest innovations in investment thinking, process and technology, underpinned by our commitment to transparent and cost effective fee structures."
Netwealth said its international equity exposure remains unhedged to provide additional diversification benefits, including when the base currency of a portfolio goes through a period of stress.
But the company clarified that while it was opening its service to advisers for the first time, its core business remains the direct to consumer market.
Charlotte Ransom, chief executive of Netwealth, added: "We have long fought to raise awareness of the destructive impact high fees can have on client returns, and are delighted to bring our sophisticated, cost-effective service to the intermediary market, enabling the clients of financial advisers to benefit from Netwealth’s thoughtful approach to investing."
Netwealth was founded by Ms Ransom, a former Goldman Sachs partner, and its chief operating officer Thomas Salter, a former managing director at JP Morgan, in 2015.
Its target market in the direct-to-consumer market is affluent and high-net worth clients.
Scott Gallacher, director and chartered financial planner at Rowley Turton Private Wealth Management, said: "The charges certainly appear competitive and we’d always welcome additional solutions for our clients.
"The only concern might be Netwealth’s lack of track record as I understand it was only launched in 2015."
Alan Chan, a chartered financial planner at IFS Wealth & Pensions, added: "For an MPS offering, the fees are quite low and in the right ballpark really for portfolio of index trackers and it’s good to see this being available to IFAs.
"However, I don’t really see us using this as we already use tracker funds that are even lower cost, such as Vanguard Lifestrategy funds, within our portfolios and even for one-off, transactional clients. We prefer a blended solution of active and index funds."