It’s an open secret that wealth managers court the largest clients so as to cream the most from their AUM each year. 

Faced with such incentives, we wonder sometimes how DFMs can support clients with such meagre portfolios such as Asset Allocator reporters.

Well JM Finn has one solution so we sat down with James Godrich, who heads up their CSI portfolios, to hear more about it. 

“For our industry, it's very difficult to serve a £10,000 client profitably,” he said. 

The range is aimed at JM Finn’s smaller clients and comprises an income, an income and growth, and a growth strategy within the wrapper of a multi-asset fund. 

And his approach to running them is by staying within the confines of the PIM benchmark to ensure a smoother ride for all involved.

“What we don't want is any big shocks,” he said. “We don't want a client to wake up tomorrow morning and find that we've got it completely right or completely wrong. And the way that, typically, you can get it completely right or completely wrong is by taking big asset allocation positions.”

But what is possiblefor JM Finn clients with less dough to invest is access to direct equities, something that’s relatively uncommon among the DFMs we cover. 

Just nine of the 50 allocators surveyed use direct equities, according to Nextwealth’s 2024 MPS comparison report. 

For Godrich, if internal capacity allows, he much prefers cutting the middleman. 

“I think that your starting point needs to be direct equities,” he said. “Can I do it through direct equities? And if I can't, then I'll move to active funds.”

A big debate in the City is whether multi-asset will ever usurp MPS, now capital gains allowances have been slashed. 

According to Godrich, should MPS allocators seek to rotate out of US equities after such a long rally, they will be faced with hefty taxable profits. 

“That rebalancing is going to cost you money,” he said. “You are going to pay capital gains tax to do that, because you have made an awful lot of gain on these positions, and now you're going to have to pay tax on those, unless you have it in a Sipp or an Isa.”

Multi-asset funds are by nature CGT-exempt and are often targeted at clients that may not typically reach that threshold anyway. 

“If we look forward, I feel much more comfortable running a multi-asset fund than running an MPS proposition,” he said. 

“And I would much prefer my money to be within a multi-asset fund where you can move and shift the allocations with zero capital gains implications. 

“But then I would say that because I run one,” he jokes.