The DFM’s Managed Portfolio Service (MPS) is now available on Novia and Transact, in addition to Standard Life’s own platform, Standard Life Wrap.
Over 3,000 IFAs are on the Standard Life Wrap platform, which has £48bn of assets under administration.
Within the next year, the team is pushing for its MPS to become available on more third party platforms, taking it from three to double digits.
“We have a target list of platforms we are in contact with, and you will see in the next 12 months an increasing numbers of platforms hosting our MPS solution,” said SLW CEO Richard Charnock (pictured).
As with the discretionary market, Charnock explained the IFA market is becoming increasingly commoditised, driven by increased regulatory demands under Mifid II and intense pressure on fees.
The amount of outsourced business that IFAs have passed onto discretionary managers has spiked noticeably in recent years, with the number of advisers using third party DFM model portfolios rising from 19% to 45%, according to research from Platforum.
“The direction of travel is to get your commoditised products on as many platforms as possible to make it easier for the IFAs that are outsourcing to do business with you because IFAs don’t just use one, they use multiple,” said Charnock.
In April, SLW’s MPS reached over £1bn of assets under management (AUM), which Charnock called a “significant milestone,” highlighting the demand from advisers looking to outsource day to day investment management, while retaining full control of the client relationship.
Products in the pipeline
Currently SLW has two types of MPS products – a target return, volatility managed fund of funds portfolio and a “conventional” portfolio that invests in individual asset classes and aims to outperform an agreed benchmark.
The Target Return MPS was launched back in 2011, while the five-strong Conventional range debuted in 2015, after SLW’s integration with Newton Private Clients, which it bought two years prior.
SLW charges 0.3% per annum for both MPS products, not including the annual management charges for the underlying funds and the cost of the platform.
Charnock said the group is currently working on building an investment proposition, to be launched later this year, which fits into the decumulation space and sits between those two offerings.
“There are target return clients who would like to take a bit more risk but still have volatility management so we could target a higher return but it will be riskier for them and that is the gap we are trying to fill”.
Charnock added that the team is also exploring the possibility of white label MPS services.
“We are observing the trend towards white label MPS, and we will see whether we can participate in that trend in the future,” he said.
Rebrand
In addition to making its model portfolio solutions more widely available to advisers, Charnock also mentioned that SLW is in the process of rebranding itself.
With Standard Life Investments rebranding to Aberdeen Standard Investments and parent company Standard Life becoming Standard Life Aberdeen, SLW is the “odd one out,” Charnock admitted.
“We are reviewing our brand and at the appropriate time we will share what our plans are going to be,” he said.
While he declined to give an exact timeline of when the changes will occur, he said, “all I can say today is that it won’t stay the same”.
He also hinted that the wealth management arm would consider M&A opportunities but stressed “they have to add value”.
“We are not acquirers for the sake of it,” Charnock stressed. “There are transactions out there going for very high multiples that we have decided not to participate in”.
