Sevenoaks-based Abacus Advice has been outsourcing to Old Mutual Wealth’s Managed Portfolio Service (MPS) for 18 months. Mike Hardy, managing director of Abacus, first started outsourcing with pension money to Royal London Governed Portfolios. His positive experience here led him to believe picking funds takes too much time.
‘Why not get it cost-effectively from an expert instead?’ he said. ‘It frees your time to talk about financial and tax planning and building a relationship with the client.
‘Most of my clients are company directors. For many, their previous experience of investment might have been with a sole IFA with no regimented process for asset allocation and fund selection. Old Mutual’s MPS has a robust process and a team of experts who review the portfolio regularly.
‘But around half of my clients are all still in bespoke in-house portfolios as they prefer that. But the work involved in that for me is disproportionate [to the benefit].’
After attending the launch of the Old Mutual Wealth MPS three years ago, Hardy thought it compared well on price with other discretionary fund manager (DFM) propositions. He waited more than a year to see if it performed as expected, then started to adopt it.
He also read a report by consultancy The Lang Cat that showed the service compared well on criteria such as cost, performance and reporting.
Hardy likes Old Mutual’s U-Scan, an investment analysis tool. He also likes the service’s quarterly reports, with fund manager commentary, valuations and performance breakdowns.
‘You just have to download these reports and post them out,’ he says. ‘It’s just a few clicks. However, the primary objective is to ensure clients benefit from the quality team and expertise at Old Mutual. So far, the portfolios have performed well compared to their sectors.’
Hardy adds Old Mutual has good service. ‘It seems well trained, knowledgeable and always willing to help,’ he says.
Hardy has not seen any similar offering that is cheaper.
The portfolios have added performance in excess of the cost and have done well against their sectors and similar offerings.
Analysis and reporting
Old Mutual provides good information with sophisticated reporting options.
The parts of the website set up for exploring funds and portfolios could be easier to navigate.
One portfolio per wrapper
If a client has multiple financial goals and time horizons, some services allow you to allocate portfolios with different risk profiles in each tax wrapper. This service does not allow that yet.
No passive option
It offers an active and a passive/active allocation blend, but not a pure passive option.
Average portfolio size of the adviser's clients: £100,000
Minimum investment limit for clients using the service: No limit
Number of the adviser's clients using the service: 60