London & Capital offers risk-rated funds through Transact

London & Capital’s Managed Portfolios are now available on Transact as the wealth manager’s drive to make discretionary fund management accessible to the mass market gains traction.

The ten actively managed, risk-graded portfolios are now accessible via both the Novia and Transact platforms, offering access to a range of assets including traditional funds and ETFs using alternative investments.

"London & Capital are delighted to have teamed up with Transact to offer intermediaries one of the most competitive products on one of the most highly regarded platform providers in the industry," says head of Adviser Solutions Bruce Ely-Johnston.

With a minimum investment of £1,000 and an annual management charge of 25bps and no initial charge, the Managed Portfolio range is a clear assault on the lower-end of the market - a sector previously beyond the radar of discretionary fund managers.

"We want to access the man on the street," says London & Capital managing director Richard Leigh. "We are dealing with the adviser gap - investors with £1,000 who want to get into a space which usually starts at around £25,000. Advisers can use our portfolios for all clients - whether they have £1,000 or  £1m."

Ely-Johnston stresses the portfolios, which he describes as a hybrid between a discretionary fund management and multi-manager offering, are aimed at empowering advisers by freeing up their time and de-risking their businesses.

He says advisers will remain at the heart of the proposition.

"A lot of IFAs are concerned about losing clients to discretionary fund managers - there is always the risk a client can cut the link with the IFA," he says. "But we do not deal with the end client - we only deal with the adviser who is in complete control."

The Managed Portfolios also tap into advisers' growing preference for third-party investment solutions in the run-up to RDR.

"The idea is to make the adviser more profitable by moving the administration to Novia or Transact and letting us take care of the investment side," adds Leigh.

Transact head of marketing Malcolm Murray agrees third party investment management is a growing space.

"There is a noticeable increase from advisers who use Transact to access the services of third party investment mangers and as London & Capital is a leading supplier of such services we are pleased to make its Managed Portfolios available."

Ely-Johnston says the Managed Portfolios mark a departure from the traditional discretionary management space. Whereas some discretionary managers earn a rebate on investments, London & Capital charge a flat fee with any rebate going to the customer's cash account.

"This removes the element of bias from choosing one fund over the other," says Ely-Johnston. 

The wealth manager is now looking to roll-out its proposition to other platforms and Ely-Johnston reveals it is holding discussions with several wrap players.

But one hurdle impeding more widespread expansion of the portfolios, he says, is the fact some platforms do not have the necessary technology.

"The main problem is platforms have been built for advisers to run investment rather than third parties," he explains.

In 2010, the Managed Portfolios posted above-target returns whilst keeping volatility below target levels. By the end of 2013, Ely-Johnston is looking to grow AUM to £2bn.

One of the key benefits the portfolios offer is the manager's ability to move 100% into cash in the event of a sudden downturn in markets.