Seven Investment Management, a subsidiary of stockbroker Killik & Co, has crossed the Atlantic to draw inspiration for its 7 IM wrap account.
Wrap accounts bridge the gap between funds of funds and discretionary investment management services offered by private banks and are popular in the US.
The 7 IM wrap account offers investors three investment options within an annual management charge of up to 2 per cent. The managed pooled option operates like a fund of funds by providing access to a range of externally managed funds from fund managers including Deutsche, Fidelity and Henderson. The funds will be chosen by a team of investment managers at Investment Manager Selection, which is headed up by Richard Timberlake. Timberlake was involved in the development of Fund Research, which subsequently became part of Standard & Poor's.
The managed segregated option enables investors to trade individual European, Asian and US shares. This offers more variety than US wrap accounts, which can only hold US shares. JP Morgan Fleming, ABN Amro and Barclays Global Investors will manage this part of the product.
An advised option is also offered and this enables investors and their IFAs to construct their own portfolios of pooled investments and individual stocks and shares.
The wrap account concept is an attractive idea and is likely to generate interest from investors who feel that the double charging element of funds of funds is a problem. However, the major drawback of the 7IM product is the minimum investment of £150,000. This will prevent people with smaller sums from investing and will limit the appeal of the product to high-net-worth investors.