Making Sense of Madness – Outsourced Managed Portfolio Services
WE NEED A BREAK FROM THE NORM
We wouldn’t blame you if, like many financial planners, you’ve become frustrated with the status quo and want to throw your outdated, off-the-peg MPS solution out the window. The irony is that in this market, what’s considered the norm is actually bent out of shape, and in many cases, in need of an upgrade.
Current MPS offerings are all too often rehashed solutions from asset management firms, put together as a defensive play; a rather blunt tool, aimed at capturing smaller value clients’ investments. They haven’t been given the attention they deserve and have ended up as the ‘poor relation’ to flagship ‘bespoke’ investment solutions.
TIME TO REASSESS THE VALUE CHAIN
Why is it acceptable for advisers to invest their resources into attracting new clients, getting to know their needs, and providing high quality advice, only for discretionary managers to communicate directly with the investor, bypassing the adviser and in turn introducing a genuine risk to the IFA business model?
And how did this situation come about? The past design and development of many solutions has been based on an outmoded belief, that investment management is the most important part of the value chain. Regulation and behaviour of the end consumer is challenging this belief and as a result the power in the value chain is shifting towards financial planners, something which discretionary managers have been slow to embrace. The tide has turned.
COLLABORATE NOT COMPETE
There is a need for discretionary managers to work more closely with advisers from the outset and create solutions that meet the needs of both the financial planning firm and their clients. There’s a great opportunity with the next generation of outsourced MPS solutions to genuinely support and promote the importance of advice. This collaboration should include offering tools and services that integrate into the existing financial planning process.
Discretionary managers who choose to work in partnership with advisers will understand that their specialism lies within the investment process, with advisers clearly positioned as the expert in the client.
GIVING INVESTORS CLARITY
The confusing, arbitrary benchmarks and investment objectives that so often characterise MPS solutions do little for managing client expectations or improving investment outcomes. Conversely, propositions constructed to bring clarity of return objectives to the client can have a radical effect. When clients have a clear understanding of what to expect from the investment journey, they will be much more likely to invest, and to continue looking to their adviser over the long term.
As part of this, ensuring client ownership for advisers is key. One way to achieve this is through an outsourced MPS solution that is available exclusively through advisers. Such an approach further confirms that interests are perfectly aligned, providing clarity over where specialisms lie, and making for a compelling investment offering.
At Blackfinch we recognise that in today’s environment, a collaborative approach is key to providing clients with high-quality financial advice, underpinned by strong investment solutions designed to enrich the experience for both you and your clients.
To understand our approach at Blackfinch Wealth, please call 01684 571 255 or email [email protected].
Visit the Blackfinch Wealth website now to view our literature.
Blackfinch Wealth is a trading name of Blackfinch Investments Limited. Blackfinch Investments Limited is authorised and regulated by the Financial Conduct Authority.