choosing a dfm partner title of presentation for … of presentation client’s name financial...

TITLE OF PRESENTATION

Client’s name

Financial adviser’s name &company name

15 AUGUST 2013

Choosing a DFM Partner

for your Investment Proposition

DYNAMIC PLANNER ROAD SHOW

Simon Doherty, Lead MPS Portfolio Manager

October 2016IDX STRATEGIES

RISK & RETURN

ANALYSIS

MANAGED PORTFOLIO SERVICE 2

Finalised Guidance FSA July 2012 (Page 17) Assessing Suitability: Replacement Business and

centralised investment propositions

Good practice

• Several firms segmented their client bank effectively and designed appropriate solutions to cater for

each segment. This included:

1. A preferred fund panel for transactional clients;

2. A suite of low-cost managed funds for clients with modest asset levels who require a low-cost ongoing

service;

3. A model portfolio service for clients with a higher level of assets and investment experience, where the

additional costs were appropriate; and

4. Discretionary fund management for clients who require bespoke investment management solutions.

SO IS THERE A PLACE

FOR DFM?


• Decision making must be based on an adviser’s business strategy rather than a product

• Represents good business practice – it must therefore be more than a box ticking exercise. Adviser

firms must be regimented in deciding what matters to them:-

- the size of a firm

- a specialist or a generalist

- investment performance

- can the DFM support my business as it grows?

- client and adviser reporting and communication

• Defaqto, Private Asset Managers (“PAM”) and Asset Risk Consultants (“ARC” through their suggestus

portal) provide useful resource

DUE DILIGENCE


A strategic approach to using an outsourced DFM solution can:

• Enhance your effectiveness by

– allowing you to focus more time on developing your business

– freeing time to focus on financial planning and client development

• Strengthen your existing client relationships by

– placing you on the same side of the table as your client

– reinforcing your role as the trusted adviser

– establishing you as the expert investment “scrutineer”

• Reduce your business risk by

– making the DFM responsible and accountable for investment performance

– establishing a clear DFM suitability responsibility for the investment solution where applicable.

• Provide you with access to specialist investment resource, research and expertise

BENEFITS OF

WORKING WITH A

GOOD DFM


• We are part of Old Mutual Wealth, a FTSE 100 company and leading wealth management business.

• With a heritage that dates back to 1771, we take a modern approach underpinned with traditional

values

• We employ over 500 people, including 165 investment professionals and manage in excess of £20

billion* on behalf of our clients

• Our investment managers are based in 12 offices throughout the UK, Ireland and Jersey

• We are regulated by the Financial Conduct Authority (FCA)

• Our clients include: private individuals and family portfolios, Trusts (onshore and offshore), SIPPS &

SASSs, Charities and Private OEICs.

* as at 30 September 2016

QUILTER CHEVIOT

– WHO WE ARE


We believe the following criteria are crucial when choosing a model-based investment solution:

• Structure - range of models; risk rating; relevant benchmark

• Investment process - types of securities; liquidity; active / passive; rebalancing

• Personnel - team structure; experience; sales support & ideas generation

• Performance - track record; real or simulated; realised volatility; downside as well as upside

• Fees & charges - initial; annual; switching

• Distribution - access via third party platforms

DFMs & MANAGED

PORTFOLIO SERVICES


BRIDGING THE GAP

BETWEEN

ASPIRATION &

ACHIEVEMENT

We take pride in our Managed Portfolio Service’s:

• Longevity – a 15 year track record of successful portfolio management

• Choice – offering a broad range of both “active” & “passive” managed portfolios

• Innovation – continuous evolution to meet the changing needs of advisers and their clients


OUR MANAGED

PORTFOLIO SERVICE

Connecting the worlds of research and

investment management

Liquid - investing in

collectives with daily

dealing*Four “index”

strategies,

lower-cost solutions

comprising

predominantly

index-tracking

funds

Seven “active”

strategies with

portfolios of

predominantly “actively

managed” funds

Regular rebalances,

regular

commentaries,

monthly factsheets

Transparent –

segregated

portfolios, not

“unitised” into fund

of funds

* subject to fund trading status


The “Active” versus “Actively Managed Passive” Debate:

• Quilter Cheviot are active investment managers and believe that returns are enhanced by active management of a

portfolio’s asset allocation and the underlying fund selection

• We apply an active management style to:

– Passive (e.g. index) funds

– Actively managed funds

• We offer two managed portfolio propositions:

– Managed Portfolio Service (MPS) – an actively managed service, investing predominantly in actively

managed funds, costing more but designed to deliver better performance

– MPS Index (IDX) Strategies – an actively managed service, investing predominantly in index-tracking

(“passive”) funds, costing less but potentially delivering lower returns

ACTIVE OR ACTIVELY

MANAGED PASSIVE?


ACTIVE OR ACTIVELY

MANAGED PASSIVE?

• We provide Services to meet the needs of clients with differing priorities:

– Those for whom the potential for significant outperformance is the priority

– Those for whom cost is the priority

• Expertise to select the “best” active or passive funds available for use

• Irrespective of approach, strategies managed to same risk parameters

Asset allocations are for illustration purposes only . Please note that the asset allocation themes of the MPS Strategies are not directly replicated within the MPS Index (IDX)

Strategies. Absolute return/hedge-style funds do not form part of the asset allocation of the MPS IDX Strategies. Therefore the above data has been prepared

for information purposes only and should not be relied upon as an indication of MPS or IDX asset allocation decisions.


Source: Quilter Cheviot, Lipper, 13 October 2016., All figures are from strategy launch to 30 September 2016. Strategy performance is shown gross of management fees with all

income reinvested, real returns may vary. Past performance is not a guarantee of future results. Please note: As the launch date differs between each strategy, the

risk/return statistics will vary according to each individual strategy’s track record. It is recommended that these statistics are considered in relation to the strategy

launch date. Asset allocations are for illustration purposes only based on strategy weightings as at 31 December 2015.

RISK / RETURN STATISTICS

Annualised Standard Deviation:

Maximum Drawdown:

Annualised Growth:

Launch Date

4.0%

-5.4%

4.6%

4.9%

-7.7%

5.8%

7.5%

-20.8%

6.9%

9.7%

-29.4%

6.8%

11.6%

-32.6%

7.4%

13.2%

-36.5%

8.1%

7.3%

-12.3%

8.9%

June ‘05 June ‘05 Sept ‘01 Nov ‘12 Sept ‘01 Sept ‘01 May ‘05

UK Equity

Overseas Equity

Alternatives

Fixed Interest & Cash

MPS STRATEGIES

RISK & RETURN

ANALYSIS


Source: Quilter Cheviot, Lipper, 13 October 2016., All figures are from strategy launch to 30 September 2016. Strategy performance is shown gross of management fees with all

income reinvested, real returns may vary. Past performance is not a guarantee of future results. Asset allocations are for illustration purposes only based on strategy

weightings as at 31 December 2015.

RISK / RETURN STATISTICS

Annualised Standard Deviation:

Maximum Drawdown:

Annualised Growth:

Launch DateApril 2013 April 2013 April 2013 April 2013

UK Equity

Overseas Equity

Alternatives

Fixed Interest & Cash

IDX STRATEGIES

RISK & RETURN

ANALYSIS

5.6%

-6.9%

6.0%

6.6%

-9.5%

6.6%

7.6%

-12.2%

7.7%

8.3%

-14.2%

8.2%


STRATEGIC ASSET

ALLOCATION

TACTICAL ASSET

ALLOCATION

FUND

SELECTION

OUR PORTFOLIO

CONSTRUCTION

APPROACH

Strategic Asset Allocation

Combination of equities, fixed interest and alternatives

Tactical Asset Allocation

Tailored to incorporate our investment outlook

Fund Selection

Alpha or ‘beat the market’ managers

Lower cost options, minimised tracking errors


QUILTER CHEVIOT FUND RESEARCH

APPROVED LIST – 200 FUNDS

FUND SELECTION

PROCESS


Source: Quilter Cheviot, Lipper, 18 October 2016. All data to 30 September 2016. Real results may vary. Data may contain estimates and may be

subject to revision at a later date. Past performance is not a guarantee of future results.

Evidence of our long-term fund selection ability – the weighted performance

of the UK fund holdings within the MPS Growth Strategy has remained

consistently above the top performing quartile since the strategy’s inception.

INVESTMENT

OUTPUT: ACTIVE

MANAGEMENT


Source: Quilter Cheviot Limited. Lipper, 18 October 2016. All data to 30 September 2016. MPS Strategy performance is shown gross of management fees with all

income reinvested, real returns may vary. Benchmarks will not include any charges. Data contains estimates and may be subject to revision at a later date. Past

performance is not a guarantee of future results.

MEETING CLIENT

ASPIRATIONS


DYNAMIC PLANNER

RISK PROFILE

MAPPING

Distribution Technology have mapped our seven MPS and four MPS Index (IDX) strategies to their

risk profiles, and they have been assigned Dynamic Planner Risk Profile scores from three to eight.

Source: Dynamic Planner, October 2016. Strategy data provided as at 30 June 2016

It is important to note that the Distribution Technology risk profile scores do not correspond precisely to the Quilter Cheviot risk rating

within our MPS literature, as Distribution Technology uses a broader spectrum of risk profiles.


MPS VIA THIRD

PARTY PLATFORMS

We offer advisers access to six of our MPS Strategies

and our four lower-cost MPS Index (IDX) Strategies via

selected Third Party Platforms

MPS STRATEGIES: IDX STRATEGIES:

MPS Global Growth IDX Growth

MPS Growth IDX Balanced

MPS Balanced IDX Income

MPS Global Income IDX Conservative

MPS Income

MPS Conservative

“The shift of DFM assets onto platforms is seen as an important driver of AUA

growth. Most platforms we speak to are actively working with DFM’s and are

onboarding a greater range of DFM model portfolios.” – Platforum UK Adviser

Platform Guide Issue 24 November 2015

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Client using our direct nominee

service are provided with detailed

six monthly reports including:

• Performance summary

• Asset allocation

• Investment commentary

• Holding and transactional data at

individual security level

Daily valuations can also be viewed online 24/7 using a secure password protected

website portal or through mobile apps.

COMPREHENSIVE &

DETAILED

REPORTING

Annual Tax Summary also provided


• Weekly, Monthly and Quarterly Market Commentaries - an update on the markets by our Chief Investment Officer, sent via email and available online;

• Daily Morning Note - an update on the markets, available every morning via email and online;

• MPS and Multi-Asset Fund Factsheets: sent via email and available online;

• IFA Newsletter – monthly issue via email with focused topics of interest to our IFA connections;

• Diary of a Fund Manager

• Website www.quiltercheviot.com

• Social media

We issue a broad range of communications for advisers and their clients, providing you with our views on current investment themes:

COMMUNICATING

WITH YOU & YOUR

CLIENTS

http://www.quiltercheviot.com/


• A Service that aligns to your investment process

• A Service that maps to your risk profiler and available via your platform(s) of choice

• Professional management of asset allocation and fund selection

• Allows you to concentrate on client service as opposed to investment management

• Access to investment funds and themes not readily available

WHY OUTSOURCE TO

A DFM?


DISCLAIMER

This document is directed at and is intended to be viewed by investment professionals only; it should not be disseminated to

or relied upon by any other person. Investors should remember that the value of investments, and the income from them, can

go down as well as up and that past performance is no guarantee of future return. You may not recover what you invest.

This presentation has been prepared for information purposes only and is not a solicitation or an offer to buy or sell any security. It

does not purport to be a complete description of our investment policy, markets or any securities referred to in the material. The

information on which the presentation is based is deemed to be reliable, but we have not independently verified such information and

we do not guarantee its accuracy or completeness. You may not recover what you invest. Changes in exchange rates may have an

adverse effect on the value, price or income of foreign currency denominated securities. The level of yield actually achieved on your

investment will be dependent on the tax treatment of the product you have invested in and your personal tax circumstances. Levels

and bases of taxation can change. Investments or investment services referred to may not be suitable for all recipients. Strategy

returns are calculated as total returns excluding Quilter Cheviot Limited annual/initial charges and inclusive of underlying fund charges

with all income reinvested. As Strategy performance is based on all income being reinvested, real portfolio performance may vary from

Strategy performance. Prices for the purpose of calculating Strategy performance are obtained on a best endeavours basis and may

vary depending on actual dealing dates. IA Sector returns are net of the underlying manager fund charges whilst benchmarks will not

include any charges.

Quilter Cheviot Limited is registered in England with number 01923571, registered office at One Kingsway, London WC2B 6AN. Quilter

Cheviot Limited is a member of the London Stock Exchange and authorised and regulated by the UK Financial Conduct Authority.

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