Consolidator Radiant Financial Group has launched a discretionary fund management (DFM) arm, Radiant Asset Management (RAM), which it says is “radically different” from other DFMs.
It said RAM was established based on feedback from financial planners and IFAs which set out what it is they want from a DFM, for example, that it should offer investment strategies "more heavily focused on capital preservation".
It added that IFAs are worried that DFMs are too focused on ensuring "their funds perform in line with benchmarks, rather than delivering what customers want".
RAM managing director and chief investment officer Minesh Gajjar said: "Clients want their investments to steadily grow but the feedback I have got throughout my two decades of working with IFAs is customers feel that capital preservation has been ignored.
"Most customers are happy to trade off some of the growth potential in their investments in order to avoid big losses. The average DFM ignores that.
"It is in markets like this that the problem over the lack of downside protection is really exposed."
He added: "The real risk for clients is the failure to achieve their financial and life goals. This led to the creation of models which focus on preserving clients' wealth whilst still providing stable and sustainable returns across a variety of market environments."
Gajjar, who joined Radiant Financial Group last year, was previously global head of discretionary and managed solutions, wealth management at HSBC. Prior to that, he was director of fund research and investment strategy at Coutts.
Alain Kerneis will be independent chair of RAM's investment oversight committee.
Gajjar added RAM had formed a strategic partnership with SEI Investments to create a range of model portfolios - it will offer seven model portfolios across two ranges named protect and grow.
RAM explained its three ‘Protect' portfolios were designed to protect against losses while working towards a steady level of growth while its four ‘Grow' portfolios have been designed to steadily grow assets and ultimately deliver better risk-adjusted returns.
Gajjar added: "We have been given the privilege to look after clients' hard-earned wealth and we have developed RAM and its models with this in mind."
Radiant Financial Group recently hit £1.3bn in assets under advice when it completed the acquisition of three firms of IFAs last month.
