Asset Allocation Research for UK Advisers

​What a budget. Our initial reaction is that the process leading up to it has been nothing short of shambolic. Endless leaks, speculation, and U-turns have exhausted everyone. Whatever happened to good old-fashioned purdah? Instead, we’ve had a free-for-all of briefings, capped off by a leak on the morning of the announcement - an extraordinary embarrassment that moved bond markets and undermined confidence in the OBR.

Elston Consulting has designed the Elston Smoothed MPS solution that has been manufactured by Elston Portfolio Management for UK advisers. 

The full article is in Money Marketing

The Smoothed Funds Survey provides a valuable look at adviser's current opinions, utilisation, and strategies regarding smoothed and with-profit funds.

At Elston Consulting, we design investment solutions delivered as portfolios, funds and indices for our financial adviser, investment manager and fund provider clients.  In the same way that advisers need to think about their target market of retail customers, we as a co-manufacturer need to think about our target market of UK financial advisers.  Target market research and testing forms an important part of our solutions design process to ensure what we develop is helpful to UK advisers and solves a client need and can be clearly communicated.  Thank you to those advisers that are participating in our market research surveys.  It might give a clue as to what is currently in the laboratory!

As asset allocators we are aware of the surplus of funds in some areas, and glaring gaps in others.  That’s why we maintain a wishlist which we share in our catch ups with fund houses.  We are now making this public to drive industry engagement.

​Some platforms pay decent rates on cash.  Others trouser the "net interest margin" - when the interest they earn on platform cash is more than they pay on platform cash.  This is something the FCA has flagged in a Dear CEO to platform providers when the rates have been unfair to Consumers.
So, advisers: if you like a platform, but don't like their cash rates, then consider smarter cash management solutions.

Basic rate taxpayers: if your client is a basic rate taxpayer then use a money market fund.  This is a way of accessing wholesale sterling money markets, whilst disintermediating the banks who have a regulatory requirement to hold money markets too.

Additional or higher rate taxpayers: if your client is an additional or higher rate taxpayer then use near-term low-coupon direct Gilts.  The capital and interest is guaranteed by HM Treasury, and the amounts are unlimited.  Their low coupon means the bulk of the quoted "Yield To Maturity" is capital gains which are CGT exempt for Gilts, meaning higher overall Gross Comparable Yield relative to money markets and cash for higher rate taxpayers.  By sticking to near-term (<3 year) gilts, there is very low (<3 year) duration risk.

For UK financial advisers only

A lot has changed since Henry Cobbe called for greater Customisation of Model Portfolios by financial advisers back in 2018.  Industry has heeded the call with Custom MPS being the fastest growing sub-set within the rapidly growing MPS market.
Henry also outlined why he thinks Advisers, not DFMs, will win the race in Managed Portfolio Services (MPS) in this podcast with FT Adviser in July 2022.

Over 90% of the approx £2bn in AUM managed by Elston Portfolio Management is in adviser-defined Custom mandates designed by Elston Consulting, who are leaders in this field.  This excludes the approx £4bn in AUM of Elston Consulting's other DFM clients including a national advice firm.

Co-manufacturing is soaring in popularity: in this workshop, Henry Cobbe explores what is it, and what are the risks in this article.

​Elston Consulting, an investment solutions provider supporting UK financial advisers has designed a range of Sustainable model portfolios built with 100% SDR compliant funds. The portfolios have been launched by Elston Portfolio Management, a platform-based MPS provider.

We discuss the rationale for being overweight US Equities given the resilient economy and strong earnings growth outlook.  But one manager's overweight can be another manager's underweight: it depends on your benchmark and how you define "Neutral."

We explore what the FCA might focus on in their review of Managed Portfolio Service (MPS) Provider

We look at the latest data from the SPIVA® Europe scorecard and key findings.  UK Small Caps are one of the few bright spots.

Elston Consulting, the investment solutions provider supporting UK financial advisers, today announces the publication of its White Paper “Operation Brit-Twist: How the issuance of more Ultra Low Coupon Gilts could attract UK Retail investor demand to help reduce the size and cost of UK Government Debt.  The white paper is available here.

Click read more to read the summary. 

Multi-asset Managed Portfolio Service (MPS) is rising in popularity, but with CGT changes Multi-Asset Funds (MAF) are getting a fresh look. What are the pros and cons

How does performance of different model portfolios for accumulation and decumulation stack up. Making regular withdrawals.

What is driving the rising demand for Custom Model Portfolios?

Henry Cobbe, Head of Research, Elston Consulting explores gaps in product development with Investment Week.

Over $2.5 trillion has been switched from actively managed to index-tracking funds.  What does this mean for providers?

Differentiating between trusts that hold real assets and listed securities allows more nuanced approach.