AJ Bell is doing away with the agent as client (AAC) structure for its managed portfolio service in favour of a reliance on others (ROO) arrangement.
The change applies to the entire MPS range including its active, passive, ‘pactive’ and responsible ranges, as well as its centralised retirement proposition for clients in drawdown.
It said moving to ROO reduces risk and cost for advisers because it means they will not be responsible or liable for the investment decisions made in the underlying portfolios.
Under the AAC model, the adviser, not their client, is treated as the client of AJ Bell which means the adviser could be liable for customer complaints regarding the underlying investments.
ROO, however, sees the underlying client treated as the investor, so there is a direct relationship between the adviser, their client and the MPS manager. The MPS manager has sole responsibility for managing the portfolios which leaves the adviser to assess only the initial and ongoing suitability of the MPS.
AJ Bell said it had updated its terms and conditions for its MPS, but no action is required from advisers. Advisers and their clients will see no difference in the way the MPS operates, it added.
It also said there will be no additional costs, no extra contact with clients by AJ Bell, and no additional client information required by AJ Bell on an ongoing basis.
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AJ Bell Investments managing director Kevin Doran (pictured) said: “This is a change driven by advisers. Our MPS is growing in popularity as advisers appreciate the combination of choice, cost and communication we have committed to offering the market.
“Having operated our partnership portfolios on a reliance on others basis for a number of years, many advisers have told us that they’d prefer the MPS to operate on the same basis. Advisers will understand the importance of that to their business, both in terms of the reduction in risk it delivers and the substantial time savings it will generate.”
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