Vantage Portfolio Management Service

Vantage introduction

EBI provides a Discretionary Fund Management service to allow advisers to free up time with a streamlined rebalancing process that will:

  • Control strategic asset class and fund "drift" within pre-set parameters
  • Remove the wide dispersion of returns often experienced by clients invested in a given portfolio due to each client being invested and rebalanced on different dates - this dispersion of results can be significant
  • Negate client consent to trade and fund swap issues
  • Give the adviser the opportunity to show added value to clients

There is also the potential for marginally enhancing returns via use of threshold tolerance bands and lower portfolio turnover and thus costs.

Whilst wrap platforms have allowed advisers increased efficiency, there remain some repetitive and time consuming tasks that rapidly decrease efficiency as client numbers grow; in particular, rebalancing and fund swaps. Vantage does this on the adviser's behalf without the need to gain client consent for portfolio changes, instructing rebalancing trades and the associated downtime to explain and document proposed changes to clients. EBI continually measures the effectiveness of the rebalancing process and provides the adviser with data to share with the client so the adviser can demonstrate the value of what is being done, adding to their service proposition.

Financial Advisers are responsible for investing, disinvesting and managing all cash requirements for their clients using templates available via Transact and Wealthtime. Vantage PMS templates are dynamic i.e. they change each day to incorporate the previous days price movements for each fund in each EBI portfolio. These daily drifted templates allow all investors into any given Vantage template to have the same holdings as all other investors regardless of when they invested. Thus when a rebalance is triggered all clients can be rebalanced at the same time. Vantage PMS required new functionality to be been designed with Transact and Wealthtime to accommodate the Vantage service. It is also available on Seven IM and Nucleus wrap platforms via our Portfolio Request service.

Cost

For most portfolios, the cost of our Vantage Portfolio Management Service is 0.10% per annum (ex. VAT), making the service arguably the lowest cost Discretionary Fund Management service available to financial advisers.

A breakdown per portfolio is below:

Portfolio Cost (inc. VAT) per annum
Vantage Bond 0.024%
Vantage 5 0.060%
Vantage 10 0.096%
Vantage 15 to 95 0.120%
Vantage 100 0.084%

Research

The Vantage service is based on a strong body of research - EBI worked with Gobind Daryanani CFP, Ph.D., who carried out extensive research in this area and developed algorithms which he used in his research paper and for a market leading rebalancing software product.

EBI initially commissioned a study based on Mr Daryanani's original principles, using UK data. The period of analysis covers 12 years, to end of December 2012 (soon to be updated with 2013 data) and when combined with Mr Daryanani's study represents a total continuous period of analysis of 21 years. This research points to a rebalancing policy designed to reduce trading costs and trade not arbitrarily on given dates, but when asset classes breach certain boundaries thus endeavouring to capture sell high/buy low opportunities. Mr Daryanani and EBI's research indicates rebalancing marginally improves returns compared to not rebalancing and annual, semi-annual, quarterly and monthly schedules. This observed "premium" is more than sufficient in most portfolios to cover the cost of Vantage. The results of the two studies will be made available to EBI licence holders.

VAT

EBI has a copy documentation from Blackstone Wealth Management, a Financial Adviser practice using EBI's services who made a "Clearance" application to HMRC to consider whether a Financial Adviser would lose their exempt intermediary financial status if they used EBI's service to rebalance client accounts held on wrap platforms. Based on the information provided, it is HMRC's view that when Blackstone makes a supply of exempt finance, Blackstone's role will remain exempt when engaging EBIP to rebalance the wrap platforms.

Wrap Platform Discounts

Due to the bespoke administration process EBI have designed and the scale of funds invested, EBI have negotiated additional discounts off some wrap platforms' standard tariffs. Details are available upon request.

If you would like to know more, please introduce your firm to us here.