Investments  

Tilney merger helps Smith and Williamson MPS negotiate better fees

Tilney merger helps Smith and Williamson MPS negotiate better fees
 James Burns, manager of the Smith & Williamson MPS range

The manager of the £575m Smith and Williamson model portfolio range says the company’s merger with Tilney is allowing him to negotiate better fees with the fund houses whose products he places in the fund. 

Tilney and Smith and Williamson completed their merger in September 2020, and have combined assets under management of £55bn.

The firms are presently located at different offices within the City, but will soon move to the same office building, which is the former Schroders headquarters on Gresham Street. 

Tilney Smith & Williamson has three model portfolio ranges: the Smith & Williamson range managed by James Burns, the Tilney range managed by Anton Snell and the Tilney Sustainable range managed by Louie French.

Burns, whose S&W range consists of six model portfolios investing in funds and investment trusts, said: “We have started to notice the impact of the combined buying power now.

"We have already been offered a cheaper share class [than previously] on four or five occasions now, because we are part of the bigger group.

"Firms know that if they are on the recommended list now, it is very powerful. And we have also had good inflows, which is helping to grow the size of our range. We still meet loads of advisers who are looking to outsource.” 

Among the changes made by Burns to the investments in the fund over the past quarter has been to instigate a new position in the Monks investment trust. 

This was the first time he has ever bought a global equity fund for the MPS, as he tends to pick single country or regional funds. 

But he said in recent months he has been concerned that the portfolios have had too much of a tilt to the value style of investing, so in order to reduce this, he bought the £3.5bn Monks trust, which is run by a team at Baillie Gifford.

Burns said the trust was growth focused but more diversified than some of the other large growth trusts on the market.

He also retains a significant exposure to the UK equity market because “UK equities are cheap right now, and that is reflected in the amount of takeover activity, which is happening almost daily.

"But to access this, it needs to be value type funds, because they would be more likely to own the undervalued companies that private equity firms want to buy, whereas the growth type funds would by their nature own companies that already trade at decent valuations.”

Platform MPS

 

Anton Snell's on-platform range meanwhile disclosed this week that it has reduced the cost of its platform MPS by an average of 18.4 per cent per annum over the past 12 months.

It too cited the firm's scale as a contributing factor. 

The service includes seven risk rated models and two income focused strategies and is available on a dozen platforms.

The firm said the team, which primarily invests through funds and ETFs, has been able to reduce costs in three ways.