Finding the balance between a tailored investment service versus cost, efficiency and scalability

Increased regulation for financial advisers in recent years has also meant a significant rise in administration obligations and costs. This trend looks set to continue. FE fundinfo’s latest Financial Adviser Survey affirms that 85% of firms have reported a rise in operational costs over the last year and that the burden of regulation was the biggest area of concern for those surveyed.

In response to MiFID II, firms have put a great deal of effort into improving their business processes and Centralised Investment Propositions to create a consistent, fully auditable approach. It’s therefore unsurprising that outsourcing investment management has seen significant growth with 57% of advisers in our survey now using third party models and managed portfolios in some capacity.

For clients with more complex needs, where external DFMs are often used, bespoke investment management services can be expensive to provide, process heavy and require higher fees. However, PROD has also highlighted that investment advice needs to be focused on individual client needs. Propositions that are too restrictive could be in danger of shoehorning clients into an investment proposition that isn’t entirely suitable.

Technology can help you find a balance between the benefits of a personalised investment service versus cost, efficiency and scalability.

Individually Managed Accounts

Individually Managed Accounts (IMAs) combined with FE Investment’s Mosaic MPS on the Standard Life Wrap platform, is an innovative new service that allows for the automation of tax planning and management within an award-winning model portfolio service.

It includes three automated tools that integrate into your advice process, allowing you to provide a more cost-effective and flexible service that you can deliver at scale.

Auto ISA

Auto ISA is an automated process that ensures your clients are using their ISA allowance at the start of each tax year. It has the potential to save you both time and cost as you are relieved from vast amounts of admin that it normally requires. GIAs and ISAs are managed as one portfolio in order to manage tax more efficiently.

CGT Allowance Harvesting

Capital Gains Tax (CGT) allowance harvesting automates the management of capital gains within our model portfolio service. The process aims to use your clients’ unused allowance before the end of the tax year, and any remaining gains are pushed into the new tax year. This allows you to provide a higher level of service and improved tax efficiencies for your clients, without extra admin. Client outcomes are improved by offering a service that promotes the efficient use of tax allowances, unlike a standard MPS.

Exclusions

The Exclusions service provides you with the ability to cut out funds that your client doesn’t want in the investment portfolio, providing you with flexible solutions that are able to take account of individual preferences or restrictions.

Download our IMA factsheet to learn more about the service.

Request IMA Factsheet

An MPS for clients with more complex requirements

Available with our Mosaic Portfolios on the Standard Life Wrap platform, IMAs combines some of the benefits of bespoke discretionary management within a managed portfolio service that’s been designed specifically for clients with more complex requirements.

The Mosaic Portfolios were designed as a cost-effective alternative to bespoke investment management. They deliver a wide selection of 25 – 45 holdings, reducing concentration risk and making them the ideal choice for clients with larger accounts.

Within each portfolio, individual asset classes or ‘tiles’ are treated as a single sub-portfolio and include a blend of fund strategies designed to harvest extra diversification benefits. The service also offers detailed reporting, designed for more sophisticated clients who are interested in the ongoing portfolio management.

The Individual Managed Accounts with Mosaic is a cost-effective solution for clients with more complex needs, who may otherwise need to consider a bespoke discretionary service. It allows you to provide a more personal service for your clients with improved tax-efficiencies, at scale. With reduced admin and costs, you can also spend more time focusing on your clients’ other priorities."

Download our Mosaic guide to learn more about how the portfolios are managed.

Request Mosaic Guide

If you’d like to learn more about the Individual Managed Accounts and Mosaic Portfolios, you can request a call back from one of our experts or speak to us on 0207 534 7628.

Request a call back

The price and value of investments and their income fluctuates. You may get back less than you originally invested. The tax treatment depends on the individual circumstances of each investor and may be subject to change in the future.