Case Study: Outsourcing Portfolios, An IFA Perspective

Increased regulatory requirements, as well as the need to drive greater efficiency and value from their business has led to more adviser firms to consider outsourcing their investment propositions to Managed Portfolio Solutions (MPS). The biggest challenge? Finding an outsourcing partner that shares your values and gives firms the oversight and control they need.

This case study looks at the process undertaken by Simon Munday of Prosperity IFA, which chose the ‘Powered by Casterbridge’ solution to manage their Prosperity Wealth Portfolios.

About Prosperity IFA

Prosperity is an IFA based in Crowborough, East Sussex. Prosperity ran its own investment portfolios since launching in 2012, but the increasing administrative burden was taking its toll, as founder Simon Munday explains:

“As our client numbers grew, rebalancing became a significant issue for us. Contacting all clients and getting their approval for the changes we wanted to make became a hugely burdensome task. Each time we were contacting more than 350 clients to inform them of changes that needed to be made and then waiting for their reply. Clients that didn’t respond in a timely manner, or didn’t respond at all, had to be left out of the change or rebalancing process, causing further portfolio complications. We reached the point where we decided that instead of managing the administrative process ourselves, it was time for us to look elsewhere.”

The selection process

Before they met with several MPS providers, the Prosperity team had a firm idea of what they were looking for from an outsourcing partner. As Simon explains:

“Performance was never an issue for us, and we didn’t want a relationship that would mean compromising on the returns we could achieve for our clients. So, we wanted to continue to have investment oversight, while outsourcing the day-to-day investment management. We spoke to a number of providers of white labelled or outsourced?solutions in the market, but Casterbridge were the most flexible and approachable. They came to us with a blank sheet of paper and began by listening to our needs, rather than telling us how they would run our portfolios.”

Powered by Casterbridge

Together, Prosperity and Casterbridge developed a suite of seven discretionary multi-asset portfolios available exclusively to Prosperity clients. The ESG Integrated Prosperity Wealth Portfolios are run by the highly-experienced investment team at Casterbridge, but with idea generation and full portfolio oversight undertaken by Prosperity’s Investment Committee. Casterbridge is also responsible for regular and ad-hoc portfolio rebalancing, as well as ongoing portfolio maintenance and administration.

Simon and Prosperity know that the portfolios are fully aligned with the firm’s centralised investment proposition and in-house attitude to risk. Crucially, because clients have signed up to have their investments managed on a discretionary basis, the administrative burden of waiting for clients to confirm their approval for rebalancing and portfolio changes has been eliminated, massively decreasing the time involved with portfolio decision-making.

The decision to outsource to Casterbridge has had other benefits too, as Simon explains:

“Every communication our clients receive is Prosperity-branded, so we retain full accountability and total control over each client relationship. In fact, since we started using Casterbridge we’ve been able to focus much more on the needs of our clients, and on growing our business, without the distractions that took up so much of our time before.”

A partnership approach focused on delivering outcomes

When it comes to managing relationships with clients, Casterbridge knows how important it is to make sure advisers have all the information they need at their fingertips. For Prosperity, we provide monthly and ad-hoc investment commentary, as well as regular portfolio factsheets. We also have an ‘open door’ policy where we can exchange views on investment markets and answer any questions on investment decisions and outlook.

As Simon Munday says:

“We like having this level of engagement in the investment process. Casterbridge shares the belief that our clients are not just numbers. Time and again they have proven that they care, and that’s the most important part of the relationship for us.”

Important Information.

This update is for information only and does not constitute advice or a recommendation and you should not make any investment decisions on the basis of it. The views and opinions within this document are those of Casterbridge Wealth at time of writing and may change without notice. They should not be viewed as indicating any guarantee of return from an investment managed by Casterbridge Wealth nor as advice of any nature. Past performance is not a guide to the future. The value of an investment and any income from it may go down as well as up and the investor may not get back the original amount invested.