Chelmsford-based EC Financial Services started outsourcing in 2014. Financial planning director Kevin Bray said: ‘When I joined in 2014, our investment process was a bit ad hoc, with no provider panel or central investment proposition. We wanted to offer a more consistent service.’
Something for everyone
It now uses Seven Investment Management (7IM) for clients with more than £200,000 to invest; and model portfolios from Parmenion or Iboss for those with less. It also uses Royal London Governed funds for pensions.
‘Within our fact find, we have our so-called style menu [which helps the client select the type of service they want],’ said Bray. ‘7IM offers a relationship management service, with a point of contact, so clients can benefit from something more personalised.’
Clients investing less than £200,000 who want to keep a close eye on their portfolios are offered the Iboss solution, in which they consent to each rebalance and change. Parmenion, meanwhile, offers a more discretionary service.
‘We feel models are the way to go, as we can benchmark against them [which you cannot do so easily with bespoke portfolios]. Parmenion has its own weighted benchmarks. I don’t see a demand for [a full discretionary service].’
A good match
EC chose Parmenion because the manager was rated well by advisers in a Defaqto report on areas such as ease of use, functionality and proposition. ‘We like the fact they do a lot of adviser-led business, rather than direct-to-consumer, and that they have proprietary technology,’ said Bray.
‘Parmenion also has a choice of models for passive only, active only, blended and ethical. That all fits with our style menu. One of the questions on it is about whether clients are more led by values or by performance.’
Bray said some other platforms he uses are not looking ahead as Parmenion does. ‘We get the feeling Parmenion is on our side. It is aware of the same things we are, such as Mifid II and technological developments.’
One Mifid II requirement is that clients must be informed of any 10% or more depreciation in their discretionary portfolio from the value at the beginning of each reporting period. Bray said Parmenion was developing loss reports.
‘We would expect to be on the front foot in advising our clients about that anyway. We wouldn’t expect to rely on our discretionary fund manager (DFM) to tell clients. But it gives me confidence they are aware of this requirement,’ he said. He welcomes regulatory improvements in DFM transparency, such as publishing an all-in fee. ‘I still find DFMs opaque,’ he said.
Into the wild
Parmenion was acquired in 2015 by Aberdeen Asset Management, which has now merged with Standard Life. Bray said there was some fear of the unknown. ‘It is business as usual and we continue to use them because of their proposition,’ he said. ‘But we don’t know if it will influence how Parmenion operates in the longer term.’
POINT OF VIEW
Comprehensive ethical options
Parmenion offers four levels of ethical conviction.
Ease of use
Its technology is adviser-oriented, so changes such as ISA switches can be made quickly. Parmenion’s reporting is also clear and user friendly.
The manager offers a wide range of passive solutions, from simple to more tactical and strategic options.
Monthly payment days
You can only make withdrawals once a month, which is restrictive.
No open architecture
Parmenion’s lack of open architecture means EC cannot self-select funds.
There is uncertainty over how the acquisition by Aberdeen, and its subsequent merger with Standard Life, may affect Parmenion.
Average portfolio size of the adviser’s clients: £67,000
Minimum investment limit for clients using the service: No minimum
Number of the adviser’s clients using the service: 80