Last week, Premier Miton finally joined the realm of model portfolio providers.
But hold up, we thought, doesn't Premier Miton already run a portfolio management service and a series of multi-asset funds? What does a model portfolio service do that its existing services do not?
We had a chat with their global head of distribution Jonathan Willcocks to get the rationale behind launching in such a competitive market.
First, he said MPS acts as a truly outsourced solution, unlike picking a multi-asset fund which has implied an active investment call on behalf of the adviser.
“If the MPS performs well, or if the MPS performs poorly relative to the other options in the marketplace, you tend to find that advisers' relationship with the client seems to stand up better than if they were being perceived to pick a fund themselves,” he said.
Willcocks added that it is a question of offering Ian Rees’s multi-manager capabilities under a different product range – and in a format that has become more competitive on price.
Indeed the target OCFs of 0.25 per cent and 0.45 per cent for their respective index and blend solutions is far cheaper than Premier Miton’s Multi-Asset Distribution fund, which has a headline OCF of 1.85 per cent.
What do the portfolios look like, then? Well, the blended range comprises 60 per cent in passive instruments, with the remaining 40 per cent filled by their own Liberation fund, which is actively managed by Rees and co.
Through Liberation, which is in itself a fund-of-funds product, Willcocks says they can navigate around some of the difficulties of launching on several platforms, such as investing into alts.
"You can get a discount or rebate of certain strategies, and also we can populate that with other sorts of more alternative, esoteric funds that you don't get access to in, say, a normal platform,” he said.
In practice, their new balanced portfolio holds a sizeable overweight to UK equities – 26.5 per cent, to be precise.
We spoke to Rees about this in April, and he told us that he believes at times the UK investor actively discriminates against the domestic market through underinvestment, which, at current valuations, he sees as ‘madness’.
