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Investment uncovered: How IFA Newell Palmer invests

Newell Palmer director Peter Bannister on managing investments in-house

Newell Palmer director Peter Bannister on managing investments in-house

Do you have an in-house approach to investment management or is it outsourced to a third party?

Most of our investment management is in-house. We run our model portfolios employing Margetts Fund Management on an ad-hoc advisory basis. We’ve been involved with Margetts for many years and its chief executive Toby Ricketts is chairman of our investment committee. It runs its own multi-manager funds and we “piggy back” on its research.

Some of our advisers use discretionary managers and some don’t. I don’t tend to but I do in certain sectors that are a bit more specialist, such as Aim and direct equity. We try to encourage the use of platforms for their functions and ease for clients who want to keep control of their assets. But we match that with a consideration of fees. If you are not careful, you pay another layer of fees so you have to make sure it’s offering good value.

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How are funds selected and monitored for your model/bespoke portfolios?

We select funds in conjunction with Margetts. We have access to its online research and review our holdings each quarter – looking at things such as if the funds are behaving as we’d expect – and we speak to the managers if things are not going right.

Last quarter, we sold a European fund and found an alternative which we’d already looked at beforehand. We don’t wait until we need to make a change – it’s almost like having a subs bench. We’re swayed by funds Margetts has researched – although not always, as Margetts doesn’t hold property, so I research that – and those where we do our own due diligence. We won’t own something Margetts is not completely comfortable with; why employ [the company] otherwise?

We are fairly loyal investors over time but may replace funds if there is a performance concern, where the principles change a little or the style isn’t right for the environment at the moment. For example, most recently we changed the M&G Inflation-Linked Corporate Bond fund because it changed duration and is now a short-dated fund. We feel it is expensive so replaced it with a fund with leaner costs.

Are advisers getting the best value from DFMs?

What DFMS do you use and why?

In relation to Aim strategies, I tend to do my own research because I’m not looking for best-of-breed, I’m looking for diversification.

The advisers who do look for best-of-breed use Vestra because we’ve done research on it and we have a good relationship. We are happy with the way Vestra manages money so we don’t really need others on the panel.

We are big enough and have the resources to manage money in-house but small enough to remain personal

If I were to go for another off-panel, I would need to do the work justifying it from a compliance viewpoint, so it tends not to be done that much. But I think it might be more commonplace in the future as more DFMs are now more likely to be available on platforms.

I think you’d find most of our advisers who move to DFMs would be steered towards those on platforms. Some DFMs aren’t on platforms and would probably be excluded.

In our experience, clients see it as fragmented if they have assets on platform which are then taken off.

What platforms do you use and why?

We use Old Mutual, Standard Life and Transact on our preferred panel and we have AJ Bell, Cofunds and Nucleus in the background. I tend to use Transact as it has more flexibility.

We’re not looking to jump ship and jump from one platform to the other for five basis points. But every two years we employ someone to review the ones we have in place and we have a dedicated platform investment team. We have acquired businesses over the years and if historically the client base is on a platform we didn’t support, we might support it.

One of our acquisitions last year had most of its assets on AJ Bell and we couldn’t justify why the clients would have to change.

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We have a few clients who are multi-platform but that is not the norm. When selecting platforms for different clients, you might find the size of the assets is a factor. Some may be more competitive at the lower end, like Cofunds, but Transact tends to be competitive at the larger end.

How does your investment management approach benefit clients and the business?

Clients like the idea of it all being done by us, they feel it’s a good one-stop shop – they can have advice and fund management under the umbrella of one company.

I think it’s also far more difficult to justify the fees you charge as reasonable without being able to demonstrate active investment.

Managing money in-house ticks that box rather than outsourcing, where clients might ask: what added value are you offering?

We are big enough and have the resources to do it in-house but small enough to remain personal. And when it comes to research, it’s all done in-house and for our advisers, so they don’t need to reinvent the wheel.


Date company established: 1993

Assets under management: Just under £2.279bn as at 1 May 2018

Number of staff: 126

Number of clients: 7,616

Platforms used: Old Mutual Wealth, Old Mutual Life, Transact, Standard Life, Cofunds, AJ Bell, Nucleus and ‘off-panel’ platform providers

DFMs used: Vestra and ‘off-panel’ DFMs


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There is one comment at the moment, we would love to hear your opinion too.

  1. What a mess – advisers in the same firm using different platforms, different investment styles and approaches . Risks all over the place and must be so so inefficient .

    Headline should be “This is how not to do it”

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