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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.
Model Portfolio Service Adviser Guide3
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.
Model Portfolio ServiceAdviser Guide 4
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
Model Portfolio Service Adviser Guide5
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.
Long term MPS Strategic Asset Allocation – Cazenove Capital Model Portfolio Service
Key points
Multi-asset: Five model portfolios consisting of funds, investments trusts and ETFs
Fees and charges: Annual management charge of 0.30%
Regular rebalancing: Portfolios are adjusted as necessary to stay within their risk profiles
Availability: Accessible through third party platform with a minimum investment from £200 per client (this may differ by platform)
Volatility Higher
Return
Lower
UK Equity Overseas Equity Targeted Absolute Return CashFixed Income Property
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
Availability Ratings
Model Portfolio ServiceAdviser Guide 6
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.
Long term MPS Strategic Asset Allocation – Cazenove Capital Model Portfolio Service
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)
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
UK Equity Overseas Equity Targeted Absolute Return CashFixed Income Property
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
Availability Ratings
Model Portfolio Service Adviser Guide7
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.
Model Portfolio ServiceAdviser Guide 8
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
Model Portfolio Service Adviser Guide9
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.
Model Portfolio ServiceAdviser Guide 10
Your Schroders Outsourced Solutions contacts
Kim NelsonBusinessDevelopmentManager,Scotland(outsourcedsolutions)
M:+447814158285 [email protected]
Oliver BecketBusinessDevelopmentManager,South(outsourcedsolutions)
M:+447469021320 [email protected]
Ashley RiderBusinessDevelopmentManger, North(outsourcedsolutions)
M:+447813439392 [email protected]
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.
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