trustee vs private client managers

Asset Risk Consultants (ARC) and the Society of Trust and Estate Practitioners (STEP) have both released average Q1 performance data from their member DFMs, with details of returns across the risk spectrum.

trustee vs private client managers

While a direct comparison cannot be made, because the portfolios are categorised differently, STEP’s lowest risk platforms returned 4.61% compared with 4.1% from ARC member’s sterling cautious portfolios.

At the medium risk level STEP members achieved returns of 7.2% whereas the ARC equivalent balanced asset index delivered investors 6.6%.

Moving into higher risk areas, the STEP high risk average return was 8.41% for the quarter, while ARC members posted growth of 8.1% in steady portfolios while its equity risk sector delivered returns of 9.7%.

All of these performances compare with FTSE 100 capital returns of 8.71% over the period, or 9.96% on a total return basis including dividends.


STEP compiles its Trustee Managed Portfolio Indices (TMPI) once a quarter and they are based exclusively on discretionary funds held in trust. Jersey-based Enhance Group uses data supplied by STEP to put the indices together.

Portfolio Adviser worked with Enhance Group in the quantitative assessment of wealth managers for its 2013 awards: view the results here.

Meanwhile, ARC creates its private client indices for sterling, dollar and euro investors and they are designed to be used by private clients and their advisers in assessing the performance of discretionary portfolios.

ARC’s website says its indices provide a “barometer for the state of the private client discretionary investment management industry”.

Asset allocation

James Painter, managing director of Enhance Group, said: “These first quarter returns demonstrate solid performance. On average discretionary investment managers have maintained a measured position given the strong market movements which have been in contrast to the continued economic headwinds.

“The indices are not aggressively positioned, with allocations into high-risk investments such as equities not at the higher end of expected ranges.”

In terms of asset allocation STEP members increased exposure to equities in strategies across the risk spectrum: low risk equity exposure increased by 2% and medium and high risk strategies both increased equities allocation by 5%.

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