The chief executive said the company’s platform model portfolio service (MPS) was “really hot” in terms of inflows during the year, growing by 70 per cent, and is now 20 per cent of the total group assets.
In contrast, the bespoke portfolio service saw net outflows as a result of advisers pulling capital from the accumulation strategies.
Shepherd said that while there have been many new entrants into the model portfolio market in recent years, creating downward pressure on fees, “the variable costs of running a model portfolio business are very low, so as you get bigger, you can be more profitable".
He said the company takes a “partnership” approach when working with advisers on their model portfolios, where they try to tailor the communications “with simple to understand literature, which helps the adviser talk to their client, and easy to understand suitability".
In terms of what’s next for business, Shepherd hopes that decumulation strategies are an area of significant growth over the coming year.
He said the firm is now using “liability matching” in these strategies, which means clients get smoother returns at the start of their retirement, while the rest of the portfolio can continue to grow.
Shepherd said: “We are writing a lot of proposals right now in the decumulation space, and so I hope in a year's time I am reporting that this has been a big area of growth for us.”
david.thorpe@ft.com
