We have improved the way model portfolios run on our system to make it easier for you to control your clients' investments.
- When a client invests in a model portfolio, their holdings will directly replicate the model portfolio.
- You will have a greater transparency around which clients are aligned to which model portfolio.
- Phasing and rebalancing will now work smoothly.
Plus, you can continue to easily build and maintain your models using either our optimised asset allocation for a given level of risk or by choosing your own asset allocation. Below you can read more about these enhancements as well as important information on how your existing portfolios will be migrated.
Eight key enhancements
This is version control for your model portfolios. It will make it easier for you to see which client is invested in each model and to keep track of who has recently rebalanced.How does it work?
Whenever you invest a client in a model portfolio, it automatically links the invested account to your model portfolio. Each time you edit your model portfolio a new version is created and the previous version becomes closed to new investments. All existing accounts invested in the previous version, as well as any instructions for rebalancing, phased investments, or regular payments, will remain the same until you choose to move them to the latest version, putting you in the driving seat.
2. Mix and match models and assets
Select any combination of model portfolios, discretionary managed portfolios, or other assets and hold them within the same account to create a truly tailored investment strategy for your clients.
3. Align to target
This option naturally rebalances your model portfolios whenever money flows in or out of a model portfolio. It does this by prioritising purchases in underweight assets and sales of overweight assets, reducing unnecessary trades in future and helping to reduce risk by ensuring your clients' portfolios stay aligned to your original asset allocation.
4. Automatic rebalancing*
Now at model portfolio level, rather than client level, automatic rebalancing is optional and can be set to rebalance:
- On a frequency basis (monthly, quarterly, half yearly, or yearly)
- When an asset breaches a percentage tolerance, which can be specified by you
- Or on a frequency and tolerance basis
5. Active edit switch
This enables you to replace individual assets on a one to one basis within a model portfolio, without rebalancing the other assets in the portfolio.Find out more about our switching options.
6. Phased investment
We have enhanced the way our phased investments work to allow you to phase into a model over a period of time, as well as being able to update and rebalance a model and update the phasing instruction online. In addition, you can instruct phased investment over a different time period, for separate contributions being made into the same account.
7. Access to exchange traded funds, exchange traded commodities and investment trusts*
You can now access a range of 450 exchange traded funds/commodities and 150 investment trusts, plus you can continue to access more than 1,700 funds, just under 80% of which are available at the best price in the market.
8. Adviser branded portfolios
The name you give your model portfolio will now be fully visible to your clients, with the name appearing on client valuations, statements and other documentation. This is a good opportunity to reinforce your brand and to highlight the service you are providing.If you have not already done so, you should review your existing model portfolio names to ensure you are comfortable with the name that will appear on client documentation.
*Please note that automatic rebalancing cannot be used in conjunction with adviser model portfolios that contain exchange traded investments.
Migration of your existing portfolios
All models that are linked to accounts will be moved to our new technology platform. There are five important things you should know prior to this migration:
1. Linked accounts
On our current technology it is possible to link your clients' accounts to a model portfolio but for them not to hold the same underlying assets as the portfolio, for example if a client is yet to authorise a switch or rebalance.On our new system, when you carry out a rebalance the clients who are moved to the latest version of a model portfolio will automatically hold those assets and the model name will appear on client-facing documents. So ahead of migration, we recommend you review the accounts you have linked to your model portfolios to ensure only those clients, invested in the model portfolio remain linked.
2. Phased investment, auto rebalancing and regular investments
Where an account has phased investment, automatic rebalancing* or a regular investment instruction that matches your model portfolio, these will remain linked to ensure the account can continue to invest as instructed.Where your client’s account is linked to a model portfolio at migration but the instruction does not match the assets or asset allocation of the model portfolio then the investment instruction will invest into loose assets, based on the original instruction, rather than directly into the model portfolio.
* Further information on how automatic rebalancing instructions will be migrated can be read here.
3. Distributions and rebates
Any distributions generated from the assets held in the account will be paid to cash within your client’s account (unless it is requested that these be paid out to the client). Rebates for assets held in model portfolios will be invested as cash within the model portfolio, rather than being reinvested into the original asset. This can then be realigned, rebalanced or switched into other investments or increased or decreased as required to meet their desired outcome.
4. Master users
If you are set up as a ‘Master User’ you may also notice that additional model portfolios have been allocated to you. This is usually because the previous creator of the model portfolio is now marked on our system as inactive. Where this is the case, we have re-allocated the model portfolio to an active Master User within the same firm so that you can edit the portfolio or assign others access where appropriate.
5. Use the correct switching option
When carrying out model portfolio rebalancing on the new platform it is important that you use the appropriate online model portfolio switching routes, to ensure that we only sell and repurchase the minimum required to rebalance your model portfolio.Please note that switching by account will switch all assets within a client's account, including cash into your chosen asset selection.
Once migrated, you will then be able to determine how you want to manage your model portfolios on an ongoing basis.
If you wish to move a specific client's assets from inside a model, you can do so by unlinking the client from the model portfolio. After being unlinked, the client's assets will appear as separate assets and they can be switched or sold as appropriate.
Visit our guides and training section to find out more information on how to manage model portfolios.
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