At the same time, AJ Bell is moving to a new in-house strategic asset allocation approach for the portfolios that will be benchmarked against Distribution Technology’s Dynamic Planner Risk Ratings. The portfolios will use the Dynamic Planner ‘risk targeted’ approach rather than the ‘risk rated’ approach to ensure the portfolios consistently target the right level of volatility, giving advisers and their clients greater certainty of ongoing suitability.
AJ Bell’s MPS gives advisers access to five portfolios that are broadly diversified across asset classes and regions and are automatically rebalanced quarterly to ensure they remain aligned with their risk targets.
The portfolios are constructed from passive investments to keep total costs low, giving an ongoing charge figure for the constituents of each portfolio ranging from 0.15% to 0.18% depending on the risk level selected. This means the new total cost for the complete investment solution is now between 0.33% and 0.36%.
The MPS makes it easy for advisers to offer their clients a comprehensive portfolio service without having to manage it themselves, leaving them free to focus on their core financial planning advice. It also helps them meet their regulatory obligation of ensuring the portfolios meet the needs of their clients.
Kevin Doran, chief investment officer and managing director at AJ Bell Investments, comments:
“Our aim with the MPS is to deliver a high quality investment solution to advisers, whilst leading the market on price. We’ve been focusing on making our investment process as efficient as possible and are able to pass the cost savings back to advisers and their clients in the form of lower annual fees.
“We also know that many advisers value Distribution Technology’s Gold Badge risk targeted solutions and so we will be moving to those in order to give greater certainty that the portfolios will always remain within the targeted volatility ranges. This should make it easier for advisers to use the portfolios within their existing business processes and ensure there are no nasty surprises.”