AJ Bell platform Investcentre is launching a responsible managed portfolio service (MPS) to capitalise on client demand for ESG investment.
The range contains six risk-rated portfolios investing in cash, bonds, equities and alternatives.
Each portfolio will use ETFs and have a 25% allocation to the VT AJ Bell Responsible Growth fund which the firm said gives “flexibility to make tactical allocation changes within the fund, rather than the rest of the portfolio, minimising clients’ potential capital gains tax liabilities”.
The carbon intensity of the balanced portfolio in the AJ Bell Responsible MPS is estimated to be 77% lower than the balanced portfolio in its Passive MPS.
The firm compared switching a £20k investment out of its passive MPS into the responsible MPS to “a high meat-eating couple going vegan”, while switching a £100k investment gives the same reduction in carbon emissions as planting 19 acres of forest in a year.
AJ Bell chief investment officer Kevin Doran (pictured) said: “The demand for portfolios with a responsible investment approach has never been higher. Advisers have told us this is important to them and a growing number of their client so, in line with our commitment to offering advisers choice, we have expanded our MPS to include a responsible investment option.”
The responsible MPS will have an investment management fee of 0.15% with no VAT, as well as the normal platform charges. The balanced, moderately adventurous and adventurous portfolios will have an OCF of 0.46%, while the cautious and the moderately cautious will be 0.42% and 0.44% respectively.
Doran added: “All the portfolios have OCFs of under 0.5% per annum, so we believe this is giving advisers a highly competitive solution for clients that want to invest responsibly without sacrificing the potential for positive returns.”
AJ Bell’s platform has gained popularity over the last year, with customer numbers increasing by 31% in the 12 months up to 31 December 2020, according to their Q1 trading update. The platform’s net inflows increased by 67% to £1.5bn.
