Jones Hill decided to outsource in 2015. Managing director Brian Hill said: ‘One piece of research we used to select Parmenion was a review of platforms by other financial advisers published by Platforum.’
Parmenion currently tops its size bracket and comes second overall. ‘That’s predominantly down to how well it services advisers and clients; charging; and ease of use,’ said Hill.
Jones Hill uses a rigorous annual selection process, using independent third-party consultants. The latest was provided by compliance partner Threesixty.
It does not set a minimum for the Parmenion service, although £30,000 is typically the lowest investment. Parmenion offers active and passive portfolios, or a blend of these.
‘We mainly use the passive ones,’ said Hill. ‘To us, the only reason to use active management is for clients wanting ethical portfolios.’
Hill added Parmenion’s end-to-end process makes life easier for Jones Hill. ‘You can do everything under one roof. So, for example, it offers two risk profilers and they are integrated in the system. You don’t need to input the information separately. It also helps reduce costs for clients.’
Room for improvement
Parmenion’s portfolios offer easy online access for clients, who can see their holdings in one easily navigable application. ‘Parmenion’s user interface isn’t as good as Hargreaves Lansdown’s or Seven Investment Management’s. But we expect this to improve,’ he added.
Jones Hill has monitored service levels and charges since it was purchased by Aberdeen Asset Management in 2015 and is pleased it ringfenced Parmenion. ‘We’ve seen no changes that would have a detrimental impact on client outcomes,’ said Hill. ‘We hope [Aberdeen and Standard Life] will invest in Parmenion.’
Hill also thinks Parmenion’s charges are competitive. ‘Clients are becoming increasingly cost conscious as cheaper direct platforms, such as Vanguard, enter the market. Parmenion has delivered great results, at under 50 basis points for most clients.’
Parmenion integrates risk profiling and you can use it as an end-to-end process.
Clients can see their holdings in one easily navigable application.
Parmenion has delivered great results, at under 50 basis points for most clients.
No direct equities
Clients cannot hold direct equities on the Parmenion platform but can only use Parmenion’s offerings, which may be a deal breaker for some.
Clients who no longer need adviser assistance cannot make changes to their holdings. If they move to the direct offering, the cost increases.
Clients have not usually heard of Parmenion, so it takes a bit of work to introduce them.
Average portfolio size of the adviser’s clients: £200,000
Minimum investment limit for clients using the service: No minimum
Number of the adviser’s clients using the service: 200