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BAM bases new DFM on five risk-graded portfolios

Berry Asset Management says its new discretionary fund management service is a more concentrated version of the bespoke multi-asset portfolios it has been running for wealthy clients for 30 years.

The firm created its new platform-based DFM around five risk-graded model portfolios that IFAs can access through the Novia platform from £1,000. The portfolios dovetail with Novia’s risk ratings and are constructed using the same team-based investment committee that is responsible for the bespoke service.

BAM says in the run-up to the implementation of the retail distribution review, IFAs have said they like the bespoke service but wanted something to offer clients who could not meet its £250,000 minimum investment. The new portfolios span defensive, cautious income, balanced, growth and aggressive risk profiles.

Not all investments that are appropriate for the bespoke service are suitable for the new DFM. When constructing the new portfolios, BAM has to take issues into account such as liquidity and offshore tax implications and says the eligible assets for a bespoke investment account are not always allowed in an Isa account. The company also says that because the new DFM is catering for IFA clients with smaller amounts in a market where costs need to be competitive, it cannot offer the additional benefits that bespoke clients receive, such as a reporting service.

Chief investment officer Mark Robinson says: “A lot of firms are embracing multi-asset investment now but we have been doing it a long time and that ticks a lot of boxes for advisers. They like our performance and they like the things we are buying. The model portfolios take the investment risk out of their hands and all the worry that goes with it.”



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