Pacific Asset Management (Pam) has partnered with Blackrock to launch a range of model portfolios to offer advisers a “credible alternative” to outsourcing to a traditional discretionary fund manager.
Pam said the five multi-asset portfolios are designed to bridge the gap between advisory and DFM model portfolios by addressing the main issues advisers face running in-house advisory models across multiple platforms.
The range is known as Pacific Model Portfolio Solutions: The iShares Edition and each strategy is split into two elements: an “efficient” half consisting of equity and fixed income index-tracking funds run by Blackrock; and a “dynamic” half which is an actively managed tactical overlay using PAM’s unitised multi-asset fund structures to tilt exposure depending on market conditions.
‘Empowering advisers’
Pam chief executive Matthew Lamb told our sister publication Portfolio Adviser that the firm’s aim is to “start empowering” advisers because a lot of the existing MPS offerings are homogenous and most of the alpha sits with the adviser’s advice.
He said: “Doing the right financial planning probably makes much more of a difference than working out which multi asset managers use. And as a result, it’s not surprising that consolidators are all after IFAs because they’ve certainly realised the value is in the IFA.
“IFAs and financial planners have also worked this out and they want to own more of it themselves, they don’t want to outsource.”
Lamb said the issue a lot of advisers face is not having discretionary permissions, or that they don’t have fund structures.
“What we wanted to do is provide the technology infrastructure, asset management IP and fund structures to allow financial advisers to efficiently tackle the problems with running advisory portfolios.”
Streamlining processes
Pam said that bulk client transition to traditional DFMs can often take more than a year, whereas the asset manager is committed to solving such issues within 90 days which significantly speeds up the process for large IFAs and consolidators aligning multiple books of business
It added the portfolios offer a “central investment proposition in a box” through streamlining the investment and reporting process, which frees up advisers to focus on client relationships and oversight of the advisory models.
The solution is delivered with adviser branded materials and advisers can access a range of tools online. It also automatically generates factsheets and communications materials.
The portfolios are available on all leading platforms but Pam’s automatic rebalancing technology is only available on Embark and Hubwise.
On the other platforms, Pam flags to the adviser when it is time to contact clients and rebalance.
Putting technology at the heart
Blackrock head of UK banks and digital distribution Joe Parkin told PA that the range has put technology “right into the heart of the advisers’ proposition”.
“The fact that we’ve delivered a model portfolio using indexing plus an asset allocation vehicle is great, but then when you overlay that with the technology and the data and the ability to report on it as one, as well as the auto rebalance mechanism, that makes the adviser’s life just so much easier.
“Technology has been a huge theme we’ve seen evolve at a glacial pace in wealth management over the last 10 years and covid has dramatically ramped that up.”
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