Premier Portfolio Managers – c-lect Portfolio
Aim: Growth and/or income by investing in actively managed unit trusts, investment trusts and Oeics.
Minimum investment: £20,000.
Investment split: Three fund of funds – balanced portfolio, growth portfolio, enterprise portfolio.
Income facility: Balanced portfolio – monthly, quarterly, half-yearly, yearly.
Charges: Initial 5 per cent, annual 1.5 per cent.
Commission: Initial 4 per cent, renewal 0.75 per cent.
Tel: 01483 400 400.
Anton Robinson – Director, City Asset Management
Chamberlain Eke – Consultant, Ashley Law
Bruce Bulgin – Partner, Chadney Bulgin
David Cowell – Associate, Andrews Gwynne & Associates
Broker Ratings (ave. marks out of 10):-
Investment options: 5.0
Company's reputation: 5.3
Product literature: 7.0
Premier Portfolio Managers has introduced a portfolio management scheme, c-lect portfolio, which invests for growth or income in actively managed unit trusts and Oeics.
Looking at how the product fits into the market, the panel are split. Eke says: “It fits quite nicely. More and more multi-manager products are being launched but there is always room for one more.”
But the rest of the panel are more lukewarm. Bulgin says: “This is another fund of funds similar to those offered by other investment groups such as Edinburgh Fund Managers and Friends Provident.”
Robinson says: “In a very competitive area, this fits in as well as any other product.”
Examining the types of client for whom the product is suitable, Cowell says: “This is for the relatively unsophisticated client who wants a little more than can be gained from investing with one investment house. It is also for the client with £20,000-£25,000 who is often below the minimum investment threshold of many portfolio management companies.”
Bulgin comments: “This is for anyone wishing to spread investments across a wide range of fund managers and who requires little direct involvement in the portfolio.”
Robinson says the £20,000 minimum investment makes it suitable for lower-net-worth individuals, while it might also be attractive to high-net-worth investors who anticipate future capital gains tax problems. He adds: “It might also be for the aggressive investor who likes investment trusts.”
Eke says: “From an IFA perspective, it will suit those who do not want to monitor their clients' investments closely. It eliminates the need for regular switching and redirection of funds as this will be done by Premier Portfolio Managers. For clients' it also removes the need to make investment decisions after the original port-folio choice.”
However, the panel are negative about the kinds of marketing opportunities the product provides. Robinson says: “It will only be of interest to IFAs who do not or do not wish to manage clients' monies.”
Eke says: “I cannot see this product offers any new marketing opportunities. It does not offer anything that does not currently exist in one form or another”
But Bulgin suggests: “This product is worth promoting to clients looking for a diversified portfolio with a relatively small amount of capital.”
Turning to the main useful features of the product, Robinson says: “It has a low minimum investment, a clear portfolio strategy and capital gains tax advantages.”
Cowell thinks the sole advantage is the fact the product has a very presentable brochure.
Bulgin says: “The most useful feature is its diversity. I like products which seem more innovative than those from some competitors.”
Eke says: “The monthly cash withdrawal facility is useful for the right clients. The life insurance cover of up to 105 per cent is also good as most companies only offer 101 per cent or just a return of fund. The report facility is also useful for both IFA and client.”
Evaluating the product's investment options, Cowell says: “They are similar to other management services. The option to take a given level of income is useful although care would be needed on approaching CGT exemption levels.”
Robinson says: “If anything negative happens to the investment trust sector, then the enterprise fund could look a bit sick, being restricted solely to this area.”
Eke says: “I consider the investment philosophy to be fairly sound. The aim of the product is the provision of active management of funds for clients, which is good. As a fund of funds however, it is too generic for more sophisticated clients. The fact the portfolio can be changed at any time is a useful feature.”
Looking at the reputation of Premier Portfolio Managers, Bulgin says: “It is not nearly as well known as some leading fund managers such as Perpetual, Jupiter and Fidelity.”
Eke says: “Premier Portfolio Managers has been trading since 1997 although the parent company, Premier, has been operating since 1987. It is far too early for it to have built up any public reputation although I would assume many IFAs would have heard of it.”
Robinson says: “It is not well known by individuals. It has a reputation in the IFA market for buying business. It appears to be doing this again with high commission rates to introducers.”
Comparing the qualities of a managed portfolio service with a spread of individual trusts, Eke says: “A managed portfolio service is very useful for clients who have a significant amount of money to invest.
“It eliminates the need to monitor a number of individual trusts for a client with small contributions in each. However, if the managed portfolio service only offers funds of funds, then I prefer individual trusts as you have more control and the growth potential is greater.”
Cowell says: “The main perceived benefit of a managed portfolio service is the potential to add value through active monitoring and management. This does, of course, mean value has to be seen to be added.
“A fund of funds does allow active trading without CGT implications. It does not, however, allow the offsetting of losses against gains. The c-lect portfolio is a cross between a full portfolio management service and a spread of individual holdings.”
Looking at the commission offered by the product, Cowell says: “At 4 per cent initial and 0.75 per cent renewal, the commission is more than fair. But reasonable? Probably not. I cannot see how an IFA who will be passing off all duties and responsibilities to Premier can justify taking such a high margin unless they are using it to subsidise other services provided to the client. Increasing trail commission by 50 per cent over the norm is asking for trouble.”
Bulgin and Eke agree the commission is higher than for other products, while Robinson comments: “The commission is very fair for the intro-ducer but it has to come from somewhere so, presumably, the client will suffer.”
Turning to the product literature, Robinson describes it as being well laid out, clear and easy to understand.
Bulgin says: “The literature is more straightforward than that of Premier's competitors.”
Cowell feels it is attractive and easy to read. Eke says: “It is good and well put together. It is, however, lacking in detail and some of the points made are not explained or clarified.”
In conclusion, Eke says: “Although the product has some strong points, none of them are strong enough to immediately attract your attention. It is advisable for new products to offer some kind of incentive to attract initial funds.”