DISCRETIONARY FUND MANAGER MINERVA
OFFERS NEW OPPORTUNITIES TO IFAS WANTING TO
SET UP MODEL PORTFOLIOS FOR CLIENTS

30 June 2010


Fund manager Paul Warner says: “We have successfully established model portfolios with several IFA firms - from straightforward conventional mandates to an ethically-orientated portfolio service - and we now have the capacity to extend that to a few more firms. But it really will be on a first come first served basis.” Unlike many discretionary services, Minerva will work with the IFA in the selection of funds to meet the investment criteria on an ongoing basis. The portfolio will be managed on a day-to-day basis by the fund manager with regular communication with the IFA.

The fund manager decides what percentage of capital goes into each fund and from time to time re-balances the portfolio to ensure it fits within the chosen investment risk category.

The service is designed to appeal to those IFAs who act as investment managers for their clients but who see that under the new RDR rules it makes sense to outsource that element of their service to the expertise of a full-time fund manager.

“Under RDR IFAs will need to be able to show the appropriate qualification as well as maintain sufficient resource to undertake the research of the entire investment market,” says Warner.

“Likewise, if a fund manager leaves a fund and the IFA believes it is appropriate to pull all clients out of it, the only equitable way to do that under treating customers fairly (TCF) is to write to every client on the same day. This creates a time lag before a response can be received from the client and action can be taken. To be efficient the execution in pulling clients’ money out of the fund needs to be made as quickly as possible,” Warner adds.

“A discretionary service enables the manager to move fast to take advantage of this situation as well as market opportunities when they arise. Then the portfolio re-balancing is undertaken to ensure that each portfolio stays within its remit in respect of its investment risk profile.”

There are no capacity constraints at Minerva for IFAs who are happy using existing portfolio models.

The annual management charge for the Minerva model portfolios is 1.5% maximum, including IFA remuneration.

Ends


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