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Lighthouse chief defends in-house funds as flows jump

Lighthouse chief executive Malcolm Streatfield

Lighthouse chief executive Malcolm Streatfield is not concerned about the FCA’s scrutiny of vertical integration as £15m flows into the firm’s investment arm in six months.

In its results for the first six months of 2017, Lighthouse reports a growth in assets within its Luceo Asset Management business, from £5m to £20m as of June. Luceo was launched in October last year.

In its study of the fund management sector, the FCA has raised questions about “competition dynamics” and value for money in vertically integrated firms, in particular the potential commercial interests of advisers in promoting the firm’s own funds.

Vertical integration focus in FCA platform study welcomed

Streatfield says the funds offered by Luceo are a “default position” for the client. He says: “We are pleased the FCA has been proactive in the marketplace. The range has to be appropriate for the client.

“We’ve designed Luceo’s funds with a specific client process in mind. The primary objective of our independent committee is that the capital is managed properly by the fund manager.”

Octopus Investments currently manages Luceo’s range of risk-rated portfolios.

Luceo will expand its fund offering in the fourth quarter of the year with a passive fund range, which will be managed by “an established” fund group.

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  1. The structures and processes Lighthouse have put in place using their technology and the Luceo funds reduce the risk of client portfolios diverging from the clients assessing suitability requirements and reduces the need for switching so the FCA should be very happy with what Lighthouse are doing.

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