• Home
  • Investment
    • Multi-asset
    • DFM & Model portfolios
    • Platforms
    • Ratings, Research & Risk
    • Tax-efficient investing
    • Markets
    • Companies
  • Retirement
    • Pensions
    • Income
    • Investment
    • Regulation
    • Estate planning
    • Equity release
  • Your profession
    • Adviser tips
    • Business models
    • Companies
    • People
  • Regulation
  • Tax planning
  • Protection
  • Technology
  • Diversity
  • Events
  • Industry blogs
  • Newsletters
  • Multi-Asset Review
  • Sign in
  •  
      • Newsletters
      • Account details
      • Contact support
      • Sign out
     
     
    •  

      Personalise your on site experience

      Download and use the apps

      Access your subscription from outside of the office

      Get relevant news and insight straight to your inbox

      Sign in
     
  • Follow us
    • Twitter
    • LinkedIn
    • Newsletters
    • YouTube
  • Register
  • Events
    • Upcoming events
      event logo
      Women in Investment Awards 2019

      Investment Week is delighted to announce our Women in Investment Awards 2019, in partnership with HSBC Global Asset Management, will take place on 27th November in London. Nominations now open!

      • Date: 27 Nov 2019
      • Finsbury Square, London EC2, London
      event logo
      Investment Marketing Leaders Conference

      Investment Week is launching the Investment Marketing Leaders Conference. This conference will aim to bring together the top decision makers from asset management firms, advisory firms and investment banks to share their own experiences, discuss future strategies and workshop practical solutions.

      • Date: 29 Nov 2019
      • Sofitel St James 6 Waterloo Place London SW1Y 4AN , London
      event logo
      Tax Efficiency Awards 2019/20

      Investment Week is delighted to announce the Tax Efficiency Awards 2019/20

      • Date: 29 Nov 2019
      • One Moorgate Place Chartered Accountants Hall 1 Moorgate Pl London EC2R 6EA, London
      event logo
      Professional Adviser Awards 2020

      The Professional Adviser Awards recognise excellence in Financial Advice. The 2020 awards will be held at The Brewery on Thursday 6th February.

      • Date: 06 Feb 2020
      • The Brewery, 52 Chiswell Street, London EC1Y 4SD, London
      View all events
      Follow our events

      Sign up to receive email alerts about our events

      Sign up

  • Whitepapers
    • Find whitepapers
      Search by title or subject area
      View all whitepapers
  • Industry blogs
  • Multi-Asset Review
Professional Adviser
Professional Adviser
  • Home
  • Investment
  • Retirement
  • Your profession
  • Regulation
  • Tax planning
  • Protection
  • Technology
  • Diversity
 
    • Newsletters
    • Account details
    • Contact support
    • Sign out
 
 
  •  

    Personalise your on site experience

    Download and use the apps

    Access your subscription from outside of the office

    Get relevant news and insight straight to your inbox

    Sign in
 
  • Trending now
  • Quilter 'not scared'
  • SM&CR checklist
  • Zurich acquisition 'opportunistic'
  • UK

Hargreaves Lansdown to make first switch to sub-advised mandates on MM range

Number of benefits

Hargreaves Lansdown's Lee Gardhouse
Hargreaves Lansdown's Lee Gardhouse
  • Laura Dew
  • Laura Dew
  • @LauraDewIW
  • 24 September 2018
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
0 Comments

Hargreaves Lansdown (HL) is set to employ segregated mandates within its £10bn multi-manager range for the first time, with Columbia Threadneedle Investments and Jupiter Asset Management the initial groups to be signed up on this basis and others added over time.

On 5 November, HL will appoint Columbia Threadneedle Investments to run a portion of its £3.3bn Multi-Manager Income & Growth Trust.

This mandate will replace direct fund exposure to Richard Colwell's £777m Threadneedle UK Equity Alpha Income fund over time, which had a 10.5% weighting in the Income & Growth fund as at 31 August 2018.

Related articles

  • Hargreaves Lansdown denies transfer backlog for all clients following Woodford saga
  • Franklin Templeton names Jennifer Johnson as new CEO
  • Chris Jones: The importance of financial advice and identifying risk
  • NHS England confirms emergency action on pension tax

Then on 7 January, HL will appoint Jupiter Asset Management to run sub-advised mandates for its MM Income & Growth Trust and £311m MM Equity & Bond Trust.

Again over time, these will replace direct fund exposure to Ben Whitmore's £2.5bn Jupiter Income Trust, which was the joint top holding in the MM Income & Growth fund at 16.4% at the end of August. The fund was a 5.4% weighting in the MM Equity & Bond fund at the same date.

Segregated mandates AUM to double in two years - NextWealth

The group said the move towards sub-advised mandates "gives us the option to access fund managers we hold in high regard without needing to invest in their funds".

It will also give HL access to institutional managers who do not have a retail fund and allow them to create bespoke strategies with managers.

These new deals should also reduce charges for the multi-manager funds over time, with HL expecting fund manager costs to decline by around 10bps-15bps following the move, although it added it did not expect savings to be seen "for at least a year". Ongoing charges figures on the HL MM funds are currently 1.3% on Income & Growth and 1.38% on Equity & Bond.

The changes are being made following approval by 88% of HL client voters, and the firm said the decision was taken now as its 10-strong multi-manager range was at a size where it was "viable" to make the shift, at currently £10bn in AUM. 

Sub-advised mandates will initially be included in two multi-manager funds, but HL anticipates these arrangements could be extended across the range in due course, with UK funds being replaced first.

'More efficient portfolios'

Lee Gardhouse, chief investment officer at Hargreaves Lansdown, said: "When we started looking into this new way of accessing managers our focus was entirely on reducing costs, but we quickly realised we could also work with those managers to create bespoke and more efficient portfolios - importantly giving us the potential to deliver better longer-term performance.

"For example, I have long felt fund managers' absolute worst habit is holding too much cash - even as little as 5% over time can act as a drag on performance. But with this new structure we can work with the managers to create portfolios for us where they run with little or no cash at all.

"I believe the future looks bright with this new flexibility but the core of what we are going to do will be unchanged."

Industry yet to grasp significance ofsegregated mandates - AFH

Since the implementation of the Retail Distribution Review in 2013, the investment outsourcing trend has concentrated flows into the hands of a smaller number of gatekeepers, who are using their increased buying power to negotiate sub-advisory mandates with asset managers. 

Providers say segregated mandates are now making up a growing portion of their retail fund flows.

In February this year, research and consultancy firm NextWealth noted the AUM of wealth managers' current segregated mandates is equivalent to 12% of retail AUM at £86bn, although it predicts this will jump to about £180bn over the next two years. 

High-profile shifts this year have included wealth manager Brewin Dolphin announcing it is set to reduce costs on its Managed Portfolio Service by £3m a year, as it moves the bulk of its investments with third-party managers from retail funds to segregated mandates.

In addition, Fidelity recently completed a move to segregated mandates on its £946m multi-asset Open range.

  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
  • Topics
  • UK
  • Hargreaves Lansdown
  • Jupiter Asset Management

More on UK

Tilney's Jason Hollands
IA Global sector enjoys record £934m sales in April

Reduced UK outflows

  • UK
  • 06 June 2019
Manager of Woodford Equity Income Neil Woodford
Woodford Equity Income under scrutiny as AUM drops further - reports

Draws attention of FCA

  • UK
  • 30 May 2019
Richard Parfect of Seneca Investment Managers
Seneca IM re-enters Woodford Patient Capital amid market 'over-emotion'

Originally held the trust in 2015

  • UK
  • 03 May 2019
RLAM picked up two gongs at last night's annual UK Lipper Awards held in London
Royal London AM leads the way at 2019 UK Lipper Fund Awards

Winners revealed

  • UK
  • 15 March 2019
UK gross domestic product (GDP) is set to grow by 1.2% in 2019, less than the 1.3% forecast in the 2018 Autumn Budget, but the economy will expand over the each of the next five year's.
Spring Statement: OBR revises down 2019 growth forecast

Warns of consequences of no deal

  • UK
  • 13 March 2019
blog comments powered by Disqus
Back to Top
  • About Us
  • Contact Us
  • Marketing solutions
  • Terms and conditions
  • Policies
  • Careers
  • Twitter
  • LinkedIn
  • Newsletters
  • YouTube

Incisive Footer Logo

© Incisive Business Media (IP) Limited, Published by Incisive Business Media Limited, New London House, 172 Drury Lane, London WC2B 5QR, registered in England and Wales with company registration numbers 09177174 & 09178013

Digital publisher of the year
Digital publisher of the year 2010, 2013, 2016 & 2017
Loading