Less than 24 hours after a Financial Conduct Authority study revealed concerns about model portfolios, wealth manager deVere Group has announced it will offer a new range of “ultra low-cost financial solutions.”
DeVere Group today (29 June) announced the launch of its new model portfolio service in association with Pacific Asset Management (PAM).
The launch comes after the FCA’s asset management market study paper stated the watchdog would explore concerns about model portfolios and outcome-focused products as part of an upcoming probe of investment platforms.
The main issues raised about model portfolios were the products are poor value for money, including extra fees for limited additional value, have potentially higher tax liabilities if investors use a model portfolio, and have poor transparency.
Nigel Green, founder and chief executive of deVere Group, said: “The asset management industry has evolved; costs are more of a predictor of future performance than perhaps was ever realised.
“As such, we’re set to offer a brand-new model portfolio service comprising of only low-cost tracker and active funds.
“It will consist of a range of risk-targeted model portfolios to match individual client’s suitability requirements.
“In a world of ultra low interest rates and the erosive effects of inflation, it is essential that we continue to offer our clients an extensive range of cost efficient, highly diversified solutions in order that they reach, even exceed, their long-term financial objectives.
“By working with Pacific Asset Management, we will be able to give investors exposure to passive funds which match their risk profile in combination with PAM’s ultra modern range of multi-asset portfolios.”
According to a spokesman for Pacific Asset Management the model portfolio service balances the cost efficient advantages of robo-advice with the common sense overlay of an actively managed solution “allowing deVere to continue to bring the benefits of the industrialisation of the asset management industry to their clients.”
The deVere model portfolio service range will initially consist of four risk targeted models.
Each model has been designed to reflect a particular level of risk an investor is comfortable with and is made up of a combination of passively managed tracker funds, which are specifically designed to work in conjunction with Pacific Asset Management’s range of multi-asset funds.
The Pacific Asset Management range is Ucits regulated, daily dealing and highly liquid, investing across active, passive and smart-beta strategies.
Mr Green said: “The decision to move to provide our clients with high quality, low cost financial solutions has been made as part of our organisation’s global strategic review.
“It is a reflection of our commitment to meet the needs and requirements of a rapidly developing industry, evolving client expectations and ongoing monetary policies.”