Seven Investment Management (7IM) has ramped up fee pressure on rival discretionary fund managers (DFMs) with the launch of a multi-asset passive model portfolio range charging 0.15% a year.
7IM claimed in a press release the five-portfolio Pathway range offers advisers a simple way to create a well-diversified portfolio of passives for clients at a low cost.
The range of model portfolios will be rebalanced quarterly, with the flexibility to change the asset allocation at any time to ensure they are still aligned with the overall strategic asset allocation.
IFAs still married to expensive DFMs
CWC Research founder Clive Waller, who is a customer of 7IM, said 15 basis points is low and will put pressure some of the expensive DFMs in the market.
He said: “Prices will continue to fall. The market is still very crowded and many IFAs are still married to expensive DFMs for questionable reasons.”
Waller noted 7IM does well year-on-year at the platform awards and this range should do well too.
“I might be biased but they are a genuine vertically-integrated provider with discretionary and multi-asset funds plus, now, low-cost MPS in addition to an excellent platform,” he said. “They are liked by advisers in their chosen market. Justin Urquhart Stewart and, before he retired, Tom Sheridan have put the miles in doing adviser presentations all around the UK, probably more than any other firm, and have done well.”
Turbulent times
Initially, the 7IM Pathway model portfolios will be available on six platforms, including 7IM, Novia, Transact, Standard Life, Aviva and ARC (Aegon). They are also available as part of 7IM’s Retirement Income Service and Discretionary offering.
The range has five portfolios of varying risk which will be managed by 7IM’s investment team.
| Asset Allocation | Pathway 1 | Pathway 2 | Pathway 3 | Pathway 4 | Pathway 5 |
| UK equity | 10% | 17% | 20% | 26% | 28% |
| US equity | 8% | 14% | 20% | 25% | 26% |
| Japan equity | 3% | 4% | 8% | 10% | 12% |
| European equity | 4% | 5% | 9% | 10% | 12% |
| Emerging markets equity | 3% | 4% | 7% | 10% | 15% |
| Global government bonds | 11% | 8% | 5% | 2% | ‒ |
| Gilts and government-related securities | 7% | 5% | 3% | ‒ | ‒ |
| Global corporate bonds | 33% | 23% | 8% | 2% | ‒ |
| Global high yield | 6% | 7% | 5% | 4% | ‒ |
| Global inflation linked bonds | 4% | 3% | 3% | ‒ | ‒ |
| Emerging market debt | 6% | 4% | 5% | 4% | ‒ |
| Real estate | ‒ | 3% | 5% | 5% | 5% |
| Cash & money markets | 5% | 3% | 2% | 2% | 2% |
Source: 7IM
7IM chief investment officer Martyn Surguy said the range will help advisers navigate the turbulent times ahead.
He said: “As we head into an environment of lower expected returns following a prolonged bull market, we believe it is the perfect time to launch 7IM Pathway, a low cost range of volatility managed, diversified portfolios made up of passives.”
