Simon James, a partner at Gore Browne Investment Management, however, is a little more cautious saying that, while he completely understands why IFAs would want the due diligence process to be made easier, in order for the comparison to be effective, the models need to be playing in the same space.
Gore Browne does not produce model portfolios and so would be unlikely to use the tool as it stands. And, as James says, it is more and more difficult to compare solutions the more bespoke they become.
He adds: “If there is too much homogenisation, it can take choice away from the client. Our concern is that by commoditising the client, you may not be treating him fairly,” he said, adding, “it might tick the regulatory boxes but it might not tick the client boxes.”
DFM’s have, historically, been reluctant to provide detailed information of their investment process, understandably viewing such things as the intellectual property on which their businesses are built. But, especially in the model portfolio space, the tide is clearly shifting against such views.
Whether or not such disclosure eventually flows over into the bespoke end of the spectrum is a more difficult question to answer, but the move by FE and other recent developments such as the STEP Whitelist are all steps in the direction of transparency.
The real challenge is now is going to be figuring out the best way to provide such data so that it is useful for both advisers and DFMs.
