Adviser firm Foster Denovo has launched its own investment platform designed for the use of its financial advisers and clients, alongside a new model portfolio service (MPS).
The platform, named Clearview, has been developed in partnership with Host Capital Digital Wealth Solutions and its custody and technology partner Third Platform services. It will provide exclusive access to a new model portfolio service, called Dynamic Portfolios (DP).
In a press release, Foster Denovo said the aim of the platform is to allow its advisers and clients to access a variety of tailored investment products, as well as providing an online hub through which portfolios can easily be viewed and monitored.
Large advice firms focus on efficiency
The latest FCA data shows on average the largest financial advice firms lose money on financial advice and earn less per financial adviser than average, notes Heather Hopkins, managing director at Next Wealth.
“Larger firms need to focus on efficiency to boost profits and Foster Denovo’s new platform with an integrated investment proposition – seems to be driven by a desire for efficiency.
“We have seen an over complexification of financial advice in recent years. Simplifying the range of options can help firms reach a larger number of clients more efficiently.
“This move wouldn’t be right for all firms. Taking on platform permissions is not a decision to be taken lightly. It comes with all sorts of obligations around client money and reporting and tends to be the least profitable bit of the supply chain. This looks like a business efficiency play not a grab for margin.”
‘Most big firms will vertically integrate to some degree’
Clive Waller, managing director at CWC Research, said: “It’s the direction of travel we have been seeing for some time. We have long believed most big firms will be restricted and vertically integrate to varying degrees.”
He said other platforms such as Seccl have been specifically developed for advisers and wealth managers that want their own platform. He said it uses modern, cloud-based technology and can be profitable with much, much lower AUM than older technology platforms.
He said: “If you are an adviser/wealth manager with a restricted proposition, you only need the ‘plumbing’ to do what you want, not what any small or large IFA in the land wants.
“By linking to specific models, the process become easier. The models are, in effect, manufacture, meaning the firm controls the whole value chain – more control, more profit and stickier from the client angle.”
MPS uses active/passive blend
The portfolios use a blend of active and passive investment styles and consider clients’ attitudes to investment risk, investment horizon and capacity for loss. Available in Isa, GIA, offshore bond and an integrated Sipp, they are grouped in to three life stages covering accumulation, consolidation and income.
Foster Denovo chief executive Roger Brosch said: “We are continuously looking for innovative ways to assist our Partners in achieving their clients’ investment and retirement goals.
“The new Clearview platform is competitively priced, meaning that our Partners can offer exceptional service to their clients, whilst remaining in a competitive and advantageous position.
“The Dynamic Portfolios provide our partners with access to a range of uniquely designed investment portfolios to better meet client needs and increase their efficiency.”
This news follows Foster Denovo’s acquisition of part of London & Capital’s UK wealth business last month and Kent-based firm Orchard Wealth Cultivation in February.
