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Cazenove Capital Model Portfolio Service

Adviser Guide

For professional investors and advisers only

1 NextWealthforFidelityFundsNetwork–BusinessChallengesfacingfinancialadvisers2019.

Adviser challenges

In a recent survey, financial advisers1 indicated that their top business challenges were:

1 The compliance burden and regulatory change

2 Increasing business efficiency

3 Stock markets and political risk

Cazenove Capital’s Model Portfolio Service ‘MPS’ can help you to address some of these challenges and deliver appropriate investment outcomes for a range of clients.

Model Portfolio Service Adviser Guide1

2 LangCatFinancial-TheStateoftheAdviserNation

The compliance burden and regulatory challenge

Financial advisers have been bombarded by regulatory updates over recent years and a model portfolio solution can help to address this increased compliance burden.

The Product Intervention and Product Governance Sourcebook (PROD)ThePRODrulesin2018haveresultedinmanyadvisersreviewingtheirsegmentation to ensure that they provideappropriateproductsand servicestodifferentclientgroups.

Amodelportfolioservicecanprovide aneffectivesolutionforaclient segment requiring:– Flexibleinvestmentoptions

alignedtotheirriskprofile– Good quality reporting across

alltheirinvestments– Investmentonaplatform– Acostcompetitivesolution

Markets in Financial Instruments Directive (MIFID II) Reportingrequirements,which include depreciation reporting are now more onerous

Theregulatoryreportingburden is fully supported by the platform wheninvestingclientassetsina modelportfolio.

Centralised Investment Proposition (CIP) Morethan80%ofadvisershave aCIP2 in place but can this help toavoid‘shoehorning’?

Amodelportfolioserviceshould offer a range of portfolios to support arangeofclientsandoutcomes.

Model Portfolio ServiceAdviser Guide 2

Increasing business efficiency

A model portfolio service can reduce the time, costs and risks associated with managing your clients’ portfolios.

Doing this yourself typically requires:

Research

An investment committee

Contacting clients for approval prior to making any changes

and rebalances

Reporting – and the demands are

increasingly challenging!

Portfolio construction

Ongoing active management

AtCazenoveCapitalourspecialistteamdrawonthesignificantrangeofresourcesacrossourbusinesstocarryoutallofthesevitalfunctionsforthebenefitofyou andyourclients.

Stock markets and political risk

It’sdifficulttokeepontopofeverythingandwhenyou’reseekingtounderstand howeconomicandmarketdevelopmentscouldimpactyourclients’investments andfinancialgoals,soithelpstoworkwithanexperiencedpartnerwithaglobalpresenceandsignificantresearchcapabilitywhocangiveyouthesupportrequired.

Our specialist multi-asset investment team comprises over 100 professionals with a local presence in the UK, Europe, US and across Asia.


Cazenove Capital MPS – At a glance Range Core models –

6activelymanagedmodels including an income solution

Active/Passivemodels– 5modelsinvestinginpredominantly passiveinstruments

Sustainablemodels- 5activelymanagedmodels alignedtosustainablevalues

�Ourbroadrangeavoids‘shoehorning’clients

Costs AnnualManagementCharge(AMC)of0.3% Competitiveinvestmentmanagement charge

Ongoing charge3 Coremodels–0.7%-0.9%

Active/Passivemodels–0.5%–0.7%

Sustainablemodels-0.8%-1.2%

Investmentflexibilitywith options for the cost conscious

Risk management AlignedtoDynamicPlanner,Defaqto,FinametricaandSynapticbutcanbe aligned to others

Flexibility to support a rangeofriskprofiles and your risk assessment process

Investments used Fullrangeofinvestmentsused, includinginvestmenttrustsand ETFswheretheywilladdvalue

Useofinvestmentsother than funds to maximiseinvestmentopportunities for clients

Service Afullrangeofserviceandsupport which puts you in charge of the relationship with your client

Ensure that you are always in full control

Minimum investment From£25permonthor£200lump suminvestment.Bothinitialinvestment and additional contribution amounts areplatformdependent.

Accessibilityofourinvestmentexpertise to a wider range of clients

Availability Availableonawiderange ofadvisedplatforms

Accessibilityon platforms and in a range oftax-efficientwrappers

3 OngoingchargeincludesAMC,costofinvestmentsbutexcludesanyadviceorplatformcharges.Feesandchargesareindicativeandmaydifferbyplatform.


The Cazenove Capital MPS options – Core portfolios

There are six core model portfolios designed to suit a broad range of clients – from the cautious to the more adventurous, who are investing for capital growth, income or a combination of the two.

Long term MPS Strategic Asset Allocation – Cazenove Capital Model Portfolio Service

Key points

Multi-asset: Six model portfolios consisting of funds, investments trusts and ETFs

Fees and charges: Annual management charge of 0.30% (trading charges may apply on some investments and differ by platform)

Regular rebalancing: Portfolios are adjusted as necessary to stay within their risk profiles

Availability: Accessible through third party platforms with a minimum investment from £200 per client (this may differ by platform)

Volatility Higher

Return

Lower

Higher Equity RiskAggressiveGrowthCautious

UK Equity Overseas Equity Targeted Absolute Return CashFixed Income Property

33

5

Balanced

30

21.615

Balanced Income

18

43.4

5

530

65

1015

33

5 30

50

7.57

30

1515

50

5 5

1515

10

2 22 3.5 2

Availability Ratings


The Cazenove Capital MPS options – Active/Passive portfolios

There are five Active/Passive model portfolios aligned to the asset allocation views of the core portfolios but with greater use of passive investments, therefore more cost-effective.


Key points

Multi-asset: Five model portfolios consisting of funds, investments trusts and ETFs

Fees and charges: Annual management charge of 0.30%


Availability: Accessible through third party platform with a minimum investment from £200 per client (this may differ by platform)

Volatility Higher

Return

Lower


Higher

5

33

55

15 15

10

3043.4

50

Balanced

1521.6

1510

18

2

50

7.57

5

3030

65

22

3.5

5

Equity RiskAggressiveGrowthCautious



The Cazenove Capital MPS options – Sustainable portfolios

There are five sustainable model portfolios which invest across ESG investment strategies to ensure that your client requirements for a sustainable investment solution can be met.


Key points

Multi-asset: Five model portfolios consisting of funds, investments trusts and ETFs

Fees and charges: Annual management charge of 0.30% (trading charges may apply on some investments and differ by platform)


Availability: Accessible through third party platforms with a minimum investment from £200 per client (this may differ by platform)

Volatility Higher

Return

Lower


Higher

5

33

55

15 15

10

3043.4

50

Balanced

1521.6

1510

18

2

50

7.57

5

3030

65

22

3.5

5

Equity RiskAggressiveGrowthCautious



About us

The combined heritage of Schroders and Cazenove Capital is unique in the investment world. Both companies have their history in trade finance that saw the City of London develop into a major commercial and financial centre at the beginning of the 19th Century.

TodayCazenoveCapitalisaleadingproviderofdiscretionaryfundmanagement, combiningtheinvestmentexpertiseofaglobalassetmanagerwithlong-standing experienceofservingadvisersandtheirclients.

CazenoveCapitalispartofSchrodersOutsourcedSolutionswhichofferschoiceand flexibilitythroughacomprehensiverangeofinvestmentservicesandproducts– fromfullytailoreddiscretionaryportfoliostomanagedmulti-assetfunds.

Founded on the strength and integrity that underpinned two great family companies forcenturies,itisourenduringcommitmenttoexceptionallevelsofserviceand expertisethatreallysetsusapart,andwillcontinuetobefundamentaltothe waywelookafterfinancialadvisersandtheirclients.

Our business is built on trust, something we have developed whilst working in partnership with advisers for over fifteen years.


What makes us different?

Some MPS providers may:

Rebalance on specific dates or at specific frequencies

Use only funds

Offer a restricted range of options

Have a limited research capability

Not have a track record in managing client investments

Not offer additional services

Cazenove Capital MPS offers:

An actively managed service and will be rebalanced or amended as market conditions dictate

Access to a wide range of investment types including Investment trusts and ETFs to maximise returns

A range of portfolio options: six core (including income), five active/passive and five sustainable portfolios

Access to global expertise of both the investment managers at Cazenove Capital and Schroders

Over 200 years experience in managing client assets and more than 70 years managing multi-assets investments

A full range of additional services including bespoke portfolio management, charity investments, IHT portfolios, banking and treasury services, investor visa, services for US taxpayers


Working with you

We’re principally here to manage your clients’ investments so you have more time to spend on financial planning.

However,we’realsocommittedtosupportingyoueverystepoftheway. Thismeansyou’llreceivefacetofacesupportfromourexperiencedbusinessdevelopmentteamandwe’llprovideafullrangeofdocumentationtohelpyou withclientconversationswhenselectingtherightinvestmentandthenexplain howthisisbeingmanaged.

Everymonthwepublishanupdatedsetofportfoliofactsheetsandaquarterlyinvestmentsummarytohelpyoukeepyourclientsinformed,aswellasemail updatesfeaturingourlatestupdates,whenappropriate.


Your Schroders Outsourced Solutions contacts

Kim NelsonBusinessDevelopmentManager,Scotland(outsourcedsolutions)

M:+447814158285 [email protected]

Oliver BecketBusinessDevelopmentManager,South(outsourcedsolutions)


Ashley RiderBusinessDevelopmentManger, North(outsourcedsolutions)


Gillian HepburnIntermediarySolutionsDirector, UKDistribution(allregions)

T:07860474528 [email protected]

Schroder Investment Management Limited1 London Wall Place, London EC2Y 5AU, United KingdomT +44 (0) 20 7658 6000

@Schroders_UKschroders.co.uk/outsourcing

Schroders

Important informationThisdocumentisissuedbyCazenoveCapital, whichisatradingnameofSchroder&Co.Limited,1LondonWallPlace,London,EC2Y5AU.AuthorisedbythePrudentialRegulationAuthorityandregulatedbytheFinancialConductAuthorityandthePrudentialRegulationAuthority.

Thecontentsofthisdocumentarebaseduponsourcesofinformationbelievedtobereliable.However,savetotheextentrequiredbyapplicablelaworregulations,noguarantee,warrantyorrepresentation(expressorimplied)isgivenastoitsaccuracyorcompletenessandCazenoveCapital,itsdirectors,officersandemployeesdonotacceptany liability or responsibility in respect of the information or any recommendations expressed herein,which,moreover,aresubjecttochangewithoutnotice.Thematerialinthisdocumentisfor information purposes only and should not be deemedtoconstitutetheprovisionoffinancial,investmentorotherprofessionaladviceinanyway.Theservices,securities,investmentsandfundsdescribedmaynotbeavailabletoorsuitableforyourclients.

Risk considerations

Wecannotguaranteethatitwillachievetheobjectivessetoutfortheportfolios.Pastperformanceisnotaguidetofutureperformance.Thevalueofinvestmentsandtheincomefromthemcangodownaswellasupandaninvestormaynotgetbacktheamountoriginallyinvestedandinvestmentsmaybeaffectedbyfluctuationsinexchangerates.Thelevelsandbasisoftaxassumptionsmaychange.Youshouldobtainprofessionaladviceontaxationwhereappropriatebeforeproceedingwithanyinvestment.

Priortomakinganinvestmentdecision, please consider the following risks:

Interest rate risk:Forportfoliosinvestedinfixedincome,changesininterestratesarelikelytoaffectthefund’svalue.Ingeneral,asinterestratesrise,thepriceofafixedbondwillfallandviceversa.

Credit risk:Thevalueofthefundmayfallifthecompaniesandgovernmentswhohaveissuedthebondsdeteriorateinquality,orintheworstcasescenariobecomeinsolvent.

Liquidity risk:Itmaybedifficulttosellsomeinvestments(orsellthemwithoutmakinga loss)duetoaninsufficientnumberofbuyers inthemarket.

Derivatives risk:Theuseofderivativesmayresultinrelativelysmallmarketmovementsleadingtodisproportionatelylarge(positiveornegative)movementsinthevalueoftheinvestment.

Counterparty risk:Thereisariskthatacounterparty may default or not comply with its contractualobligationsresultinginfinancialloss.

Currency risk:SomeportfolioscanholdinvestmentsthatarenotdenominatedinUKpoundsterling(£).Thesemaybeaffectedbychangesincurrencyexchangerates.

Emerging market risk:Someportfoliosmayinvestinmarketswhereeconomic,politicalandregulatoryfactorscanbesignificant.Thismayaffecttheliquidity,settlementandassetvalues.Anysucheventcanhaveanegativeeffectonthevalueofyourinvestment.Investmentsinemergingmarketscandemonstratesignificantdeclinesinvalueoverextendedperiodsoftime.

Property risk:Propertymaybedifficulttosell andcandemonstratesignificantdeclinesin valueduetochangesineconomicconditions andinterestrates.Notallrisksareapplicable toallsolutionsavailable.

Therisksabovearenotapplicabletoall solutions.Thefulldetailscanbeviewed onthespecificfactsheets.

CS2513

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