invesco model portfolio service enhancing your client...

This document is for Professional Clients only and is not for consumer use.

Invesco Model Portfolio Service Enhancing your client experience

In an environment of increasing competition, the best way to differentiate your business is by delivering an exceptional client experience, one that puts clients at the heart of what you do, at every step.

02 Invesco Model Portfolio Service Invesco.co.uk/mpsexperience

How our Model Portfolio Service can help you deliver a world-class client experience:

Ongoing commentary

Digital valuations

Investor engagement


In order to deliver a consistent experience at scale, it becomes critical to think about how you incorporate digital technologies to implement and manage your client experience. The benefits of doing so can also help:– Reduce business risk: by ensuring

a robust audit trail across client communications

– Reduce admin headache: by automating paperwork and lower value client interactions, enabling advisers to focus on high value client interactions

– Clearly define service propositions: to ensure consistency of service levels and client outcomes.

Invesco’s Model Portfolio Service is embedded within Intelliflo’s business management system, Intelligent Office, enabling your clients to access the Personal Finance Portal. This digital portal gives you and your clients an invaluable tool on which to view financial information and interact via a secure, online 'hub' anywhere and on any device.

The Personal Finance Portal also enables you to:– deliver a consistent client experience

at scale– seamlessly seek investor authorisation

for rebalancing models– deliver white labelled and market-

leading commentary directly through the Personal Finance Portal to engage and educate your clients

If you are a current Intelliflo user and not yet using the Personal Finance Portal, your Intelliflo customer relationship manager would be delighted to provide you with further information.

1 Advisor Benchmarking Inc. an affiliate of Rydex Investments/Practice Made More Perfect Mark Tibergien and Rebecca Pomering – Bloomberg Press 2011.

Digital advice The adviser-client relationship has always been the bedrock of sound financial advice. But the benefit to a firm of investing in and developing its client experience has become paramount to how it succeeds and differentiates its service offering. Research has shown that elite firms spend up to 46% more of their time focusing on building and nurturing client relationships than the average financial planning practice.1

“ By selecting Invesco as your trusted investment partner, valuable time can be redeployed to engaging with clients, existing and new, offering important guidance through the emotional journey of reaching their financial goals.”

Ben Gutteridge Director of MPS

Ongoing commentary As part of our service to you, Invesco will provide ongoing commentary covering market updates, as well as portfolio-specific insights.


The person behind our market-leading commentary is Ben Gutteridge, supported by the broader Invesco Investment Solutions team. Ben joined Invesco in January 2020 as Director of the recently launched Model Portfolio Service. Prior to joining Invesco Ben was a Research Director at Brewin Dolphin, sitting on the Asset Allocation Committee, as well as heading up their 3rd party Fund Research team.

Ben has over 10 years of experience in helping to manage Model Portfolio Services and delivering stimulating updates to clients. He is also a frequent commentator in written and televised media, he has a degree in Mathematics from Loughborough University, holds the Securities Institute Diploma and is a CFA Charterholder.

The Invesco Investment Solutions team is a client-centric group of investment professionals with extensive experience of working across investment teams globally to develop their portfolios. The team currently manages over 230 portfolios with approximately US$29bn2 in assets under management that include active, passive and hybrid models. Chief Investment Officer, Duy Nguyen, and Head of Research, Jacob Borbridge, are supported by a team of over 60 experienced professionals, which contributes resources and insight to the development of model portfolios.

2 Invesco: as at December 2019.

Commentary type Description Audience Frequency

Model description

01 Model updates See page 06

02 Model commentary See page 06

03 Detailed market insights See page 08

04 Market insights See page 10

An overview of the model including its risk ratings

A description and rationale of any changes made to the models

Commentary on those funds having the greatest impact on portfolio performance

More in-depth market commentary report Succinct market and economic updates

Client-facing Client-facing – with the ability for advisers to tailor content Client facing – with the ability for advisers to tailor content. Triggered by the adviser rebalancing the model Client and adviser Client-facing

One-off It is expected that model updates will occur infrequently Quarterly

Quarterly Ad hoc

How it works in practice


01 Invesco Model Portfolio Service invesco.co.uk/mps

This document is for Professional Clients only and is not for consumer use.

Invesco Model Portfolio ServiceGiving you choice and control


01 | 02Model updates and model commentary Access commentary from Invesco on the Model Portfolio Service, which you can then tailor as much or as little as you'd like for your client.

What you will see

What your client will see

You will receive model commentary from Invesco on a quarterly basis that you are able to include in your rebalance recommendation. You can fully customise this content within Intelligent Office before sharing with your clients.

When models are updated, you’ll receive model update commentary from Invesco which you can fully customise within Intelligent Office before sharing with your clients.

A

B

C

C

A

B

Once you are happy with any customisations you’ve made to the rebalance recommendation and you click the 'Proceed' button, the content will automatically push into the Personal Finance Portal where your clients will be able to view your recommendation and authorise any changes to their portfolio.

C


Model updates and model commentary Access commentary from Invesco on the Model Portfolio Service, which you can then tailor as much or as little as you'd like for your client.

What your client will see (cont.)

Your client can click ‘Funds Analysis’ to view a more detailed breakdown of their portfolio drift.

Your client can view their current portfolio, including drift, by individual fund as well as download fund fact sheets.

D

E

D

E


UKIn an all too familiar pattern, the many and varied potential outcomes of Brexit continued to dominate the headlines in the fourth quarter. A decisive victory for the Tory party in December’s General Election, however, brought an end to the immediate deadlock and has all but secured the UK’s departure from the European Union by 31st January 2020. The removal of any imminent threat of a ‘No deal’ scenario boosted both UK share price performance and sterling, as did the avoidance of a more radical left-wing administration.

It was a very good quarter for the pound, though gains were trimmed as PM Johnson declared a trade deal with our European partners must be secured by year end 2020. This commitment was made clear when Johnson also revealed his ambition to legislate against the option of extending negotiations. Notwithstanding the government’s ability to reverse any new law, the outcome is a renewed threat of a deferred ‘No deal’ Brexit outcome at year end; though it needn’t be the base case scenario.

USUS equity performance was strong in the final quarter, but returns were less impressive for UK investors as the dollar suffered a period of persistent weakness. Significant policy choices from both the government and the central bank served to boost risk appetite globally.

Trump, for his part, delivered a partial agreement on the US-China trading relationship. The arrangement has some opacity but essentially commits the Chinese to buying more US agricultural goods, to avoid any unfair manipulation of its currency, and to take greater responsibility in policing inappropriate transfer of US intellectual property. In return the US will cut tariffs on a selection of Chinese imports. The next phase of the talks will be equally tricky, if not more so, as China will be asked to open its markets up to both greater international competition but also operational scrutiny. Despite the challenges ahead, this ‘Phase One’ agreement is good news for the global economy as the threat of spiralling tensions has weighed heavily on business investment around the world. The US central bank reaffirmed its commitment to a generous interest rate environment, citing benign inflationary conditions as the dominant force behind its strategy. Inflation is a favoured measure of froth in an economy by the central bank community and its absence affords these institutions the flexibility to remain accommodating.

Example commentaryThe final quarter of 2019 was another positive one for stock markets across the globe, adding to impressive gains already accrued through the year. Buoyed by the electoral outcome UK stocks enjoyed a hitherto rare period of outperformance, whilst Asian and Emerging Markets also benefitted from easing trade tensions between the world’s two major super powers.

It was a less auspicious period for bond markets as an increased appetite for risk taking resulted in marginal sales in favour of equities.

In keeping with increased levels of risk appetite, the dollar also endured a period of weaker demand and performance, which also served to boost the price of gold. The yellow metal typically benefits from a weaker dollar regime.

03Detailed market insights More detailed market commentary is available on the Invesco MPS website, which you are free to re-use in any format with your clients.


EuropeA similar story unfolded in Europe as impressive stock market returns were offset by currency losses as the euro weakened against a rising pound. Again, share prices benefitted from firm progress in the US-China trade negotiations and the avoidance of an imminent ‘No deal’ Brexit, but European equities were also boosted by a resurgent banking sector. As interest rate expectations have gradually crept higher, from a very low starting point, optimism has increased these institutions may be able to earn greater margins on existing and fresh loans.

JapanAttention is most acutely focused on the latest attempts by the Japanese government to deliver greater fiscal conservatism in its approach. The latest efforts have seen VAT levels increase, much to the frustration of an already frugal consumer. Retail sales plummeted after its introduction, even more so than some very downbeat expectations. Markets performed reasonably well, however, as the government worked hard to deliver some offsetting fiscal support measures.

In a very strong period for the pound Japanese equity returns for sterling investors disappointed relative to UK bourses. Asia & Emerging MarketsAsian and Emerging market currencies are a volatile collective and, as a result, play a crucial role in UK investor total returns for their respective equity markets. Of equal importance in determining whether these currencies are performing, is the direction of the dollar. Many Emerging Market economies use dollar borrowing to fund growth projects and its appreciation makes debt servicing a heavy tax to bear, weighing on profit performance and returns. The consistent weakness from the dollar therefore, through the 4th quarter, proved a beneficial backdrop for Asian and Emerging Market equities. Confirmation of the US-China trade deal was also a clear benefit to the asset class, given the regions’ greater manufacturing and trade dependence.

Detailed market insights More detailed market commentary is available on the Invesco MPS website, which you are free to re-use in any format with your clients.

BondsThe general tick up in risk appetite was a less helpful environment for safe-haven assets such as government debt, which lost money in the fourth quarter as investors sought higher returns. It is unlikely, however, that any severe damage will be inflicted upon government bonds, at least in the short term. These assets are very sensitive to interest rate expectations, generally losing money as they move higher and gaining as they fall. With inflationary pressure remaining dormant, there is scant evidence the global economy is overheating, even despite the strength in the labour markets. Given this backdrop the world’s leading central banks are continuing to communicate their commitment to extending generous interest rate policy; particularly the most important of all, the US Federal Reserve.

Like equities, corporate bonds fared better than government issues given their additional sensitivity to the profit outlook, which improved over the quarter given some of the issues discussed.

ConclusionImproving geopolitical news flow has encouraged investors to increase equity market exposure and helped deliver additional gains in the fourth quarter. The dominant story, however, remains central bank strategy, which continues to remain very supportive in the absence of inflationary pressure. With interest rate hikes off the table it is hard to justify raising the probability of an imminent recession and taking overtly defensive action in portfolios.

As Peter Lynch, the famed American investor and philanthropist so aptly detailed, “Far more money has been lost by investors preparing for corrections or trying to anticipate corrections than has been lost in corrections themselves.”

“ The UK stock market took kindly to the Conservative Party’s ‘thumping’ majority in December’s election, likely enjoying the end to the Brexit deadlock. Boris has given his government a tight deadline to complete talks over the future relationship, with the year end seemingly a hard cut off. A ‘No deal’ needn’t be the base case, but it’s possibility remains, and may yet inject further volatility into UK assets.”

Ben Gutteridge Director of MPS

04Market insights Ongoing market insights are provided by Invesco. Insights will appear alongside your client's advised portfolio summary within the Personal Finance Portal.


Investment risks

The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

Important information

This document is for Professional Clients only and is not for consumer use. All information as at January 2020 unless otherwise specified. Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice.

Issued by Invesco Asset Management Limited Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire RG9 1HH, UK Authorised and regulated by the Financial Conduct Authority

EMEA575/64958/PDF/280120

Contact details

Telephone 01491 417600 [email protected] www.invesco.co.uk/mpsexperience

Telephone calls may be recorded.

invesco model portfolio service enhancing your client...

Documents