The evolution of MPS…and the Spartacus effect

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Oct 11, 2019

Last week I attended Platforum ID: the investment distribution conference which took place in London. As you’d expect, it was well attended and had some excellent speakers. 

I was invited to take part in a panel discussion entitled: How solutions are structured and what selectors are looking for. The session was chaired by Platforum’s Danby Bloch and alongside me were representatives from Tatton Investment Management and AJ Bell.

One of the topics under discussion was about evolution around investments. In my view, there are two key ones happening right now:

  • Advisers evolving to outsourcing investment work to professionals. I see this as being in the latter part of its development overall.
  • Professional managers evolving from a me-too MPS service to a mass-customisation (scalable bespoke) approach, which I believe is only just now starting to evolve, mainly due to the pressures of meeting regulations such as PROD, or Product Intervention and Product Governance Sourcebook, to give it its full name.

I am Spartacus (not)

On the topic of mass-customisation, it’s definitely a hot topic and one that many DFMs are trying to offer. I say ‘trying’ because there are very few who can actually claim to do it well (if at all). That’s not just my opinion.

Last week one of the PortfolioMetrix team met with an editor from a leading financial adviser publication and, when this topic came up, the editor said it was his view that there is an ‘I am Spartacus’ situation with DFMs and mass customisation. He says it seems everyone is saying they can do it but few are actually able to do so. 

This isn’t particularly helpful as PortfolioMetrix is genuinely able to do this. It’s what we set the company to do back in 2010 and it’s only now that we’re seeing others trying to offer something that allows advisers to achieve the segmentation that PROD requires.

Shoe-horning in tech is a bad idea

The issue as I see it is that many DFMs are trying to shoe-horn technology to fit with their existing structures, which can be a bit of a recipe for disaster, or just plain ineffective.

The difference with PortfolioMetrix is that we set up our technology to do this from the get-go and we have a long track record that shows it really does work. Not only does it work well, it makes a huge difference to advisers who want to offer portfolios that truly meet the individual needs of their clients. So, we’re not Spartacus, but we do have a loyal following of adviser partners who are keen to stand up and tell others how happy they are to work with us.

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PortfolioMetrix are a multi-award winning, innovative investment manager that provides independent financial advisers with an alternative way to access discretionary investment management for their clients. Our proposition comes at a competitive price and doesn’t compromise the adviser/client relationship. The London winner of the Citywire Wealth Manager Regional Stars award for two consecutive years, voted the WM Small Business of the year, in association with ARC 2018 and, in 2019, have received the accolade of PA Discretionary Manager of the Year. Our proposition offers the convenience of online model portfolios yet delivers customised portfolios, tailored to individual client requirements. Investment performance has demonstrated consistent and reliable risk and return separation of portfolios that doesn’t undermine the financial planning process. This is achieved through our academically-robust, risk-based investment approach. WealthExplorer™ is integral to the PortfolioMetrix customised service. A proprietary owned and designed software system, WealthExplorer™, is purpose built to equip advisers with a broad range of tools designed to deliver unique client insights that add value to the adviser/client relationship and ultimately delivers better client outcomes, when utilised by financial advisers.

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