View more on these topics

Ready-made portfolios risky and expensive, advisers warn


Model portfolios focused on attracting non-advised clients could be risky and expensive, advisers warn.

Non-advised giant Hargreaves Lansdown recently launched its “third way” proposition, Portfolio +, which provides investors with six ready-made portfolios ranging from Adventurous Income to Conservative Growth.

Portfolio + investors pay the ongoing charges of the underlying funds, ranging from 1.34 per cent to 1.46 per cent, and an annual platform charge of up to 0.45 per cent per annum.

Investment Quorum chief executive Lee Robertson says: “There is a potential for risk with these model portfolios. People could buy stuff they don’t understand or wasn’t what they expected. That is the risk you take when you try to cut costs.”

Informed Choice managing director Martin Bamford agrees non-advised model portfolios are “potentially risky”.

Yellowtail Financial Planning managing director Dennis Hall adds: “With advice and using low- cost funds, my clients get it cheaper. There is a lot of fat in there for companies like Hargreaves Lansdown, clearly.

“[Portfolio +] differentiates what they are offering slightly but it doesn’t make it any cheaper. I find it very unexciting as they are doing it purely for marketing and profitability reasons.”

Hargreaves Lansdown senior analyst Laith Khalaf says: “Portfolio + offers pretty good value to investors. It is not the cheapest one, it is not a tracker, but you get the platform, the underlying managers, and a lot of services within the portfolio.”


FCA interior logo 620x430

FCA bans ex-equity release boss over ¬£1m ‘illegitimate transfers’

The FCA has banned Kevin Allen, the former sole shareholder of mortgage intermediary NMB, for propping up the business through “illegitimate transfers” from New Life totalling £1m. Allen, who was finance director at equity release provider New Life, funnelled the money between 2009 and 2013 without the knowledge of the other New Life directors. Allen […]

Andrew Tyrie Tory conf 2013.jpg

Tyrie re-elected Treasury committee chair

Andrew Tyrie is to remain as chairman of the Treasury select committee after challengers failed to emerge for the role. Tyrie led the committee throughout the last parliament, becoming a high profile critic of the FCA and the Bank of England, as well as the wider financial services sector. In one of the committee’s final […]


JO Hambro poaches F&C’s Ulrich for Wood’s UK fund

JO Hambro Capital Management has hired former F&C manager Michael Ulrich to work alongside John Wood on the UK Opportunities fund. Ulrich will work alongside lead fund manager Wood, fund manager Rachel Reutter and analyst Todd King on the £1.6bn UK fund. He joins in mid-August. He left F&C in April this year, where he most recently […]


HSBC to rename UK retail arm

HSBC plans to change the name of its ring-fenced UK retail banking arm as part of an overhaul that will see 8,000 jobs slashed. The Telegraph reports the bank, which employs 26,000 staff in the UK, plans to change the name of its branch network once it has been legally split from its global operations. […]

China: growth defence or another debt-fuelled boom?

By Douglas Turnbull, Head of Chinese Equities at Neptune Following recent stimulus efforts from Beijing, Neptune’s Douglas Turnbull examines how the government’s long-term reform agenda can be balanced with supporting growth and addressing structural challenges, and the investment opportunities arising from this.Click here to read more Important information: Investment Risks Neptune funds may have a […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment