Legal & General Investment Management (LGIM) has today announced a Model Portfolio Service (MPS) partnership with Apollo Investment Management (AIM), a leading investment consultancy and Independent Financial Adviser (IFA) with offices across the UK.
LGIM will provide five tailored Model Portfolios, with a range of risk-adjusted strategies for AIM’s professional and retail clients under the umbrella of IFP Associates Ltd. LGIM will also manage the rebalancing of the model portfolios to ensure investments are continuously aligned with investors’ risk and return profiles. The portfolios will be white-labelled and the wrap-around service will include regular investment and strategy updates from LGIM’s investment and distribution teams in conjunction with AIM.
This new partnership will stretch across a broad range of funds and research capabilities, with input on fund selection and asset allocation by both parties. It will also allow AIM to leverage data and investment insights from LGIM’s highly experienced asset allocation team with over 40 investment professionals, headed up by Emiel van den Heiligenberg, LGIM’s Head of Asset Allocation.
The tie-up builds on the momentum of the MPS business, with LGIM’s Model Portfolios added to SimplyBiz’s risk controlled investment solutions range earlier this month. The wider MPS proposition now services almost 40 clients and partners across a number of adviser platforms. Pricing aims to be competitive – with increasing fee pressures on financial advisers, the LGIM MPS solution is set at an initial annual management fee of 6bps.LGIM’s MPS offering also includes solutions that can be white labelled to suit adviser needs.
Dorian Squires, Investment Director at Apollo Investment Management (AIM) commented: “This partnership has real benefits in efficiency making things much more scalable. In addition, the symbiotic relationship with the wider LGIM research capabilities allows for a much wider range of levers that can be pulled within the portfolios to seek to enhance returns for the end investor.”
The regulatory burden on IFAs is likely to increase further with new Consumer Duty rules and as part of this partnership, LGIM will also take on the mandatory due diligence required by the regulation, including the management of risk, compliance and reporting functions. This will allow AIM to focus on the collaborative fund selection approach and providing financial advice to their clients.
James Crossley, Head of UK Wholesale, LGIM, added: “We are excited to begin this collaborative new partnership and approach with AIM, offering their clients a broad range of funds and research capabilities. As firms review their Consumer Duty implementation plans, we believe LGIM remains well positioned to offer a broad range of tailored and robust investment solutions at a competitive price.”
LGIM has established a robust risk management framework and a dedicated governance committee to ensure that portfolios remain on track. The LGIM Asset Allocation team oversees £70 billion in multi-asset funds and will work in partnership with LGIM’s Solutions team, which oversees £200bn of institutional client portfolios, bringing together an array of expertise and experience from across LGIM.
