Any experience of 7IM,Cheviot,BestInvest or Berry DMS

StillLearning

I am looking for a discretionary (investment) management service) for sum just about £900k (50% ISA wrapped, 20% UTs, 30% SIPPS). I have managed these myself for 15 years (with Cofunds, HGL, Fidelity etc..) and a specific asset allocation model both in terms of assets and geographical allocation.

For personal reasons now look to use a DMS. I say this as I am know many in this forum may disparage DMSs as expensive etc.. but now for the future it looks I will need to use one. I have approached 4 directly ( cannot see any reason to approach IFA as they will often work only with one DMS) and sent detailed enquiry.

Does anybody have experience of using for DMS:

• Berry Asset Management
• Cheviot Asset Management
• Seven Investment Management ( 7IM )
• Best Invest (NOT their advisory service but their full investment management service)

Any other suggestion of providers from first hand experience for large large sums would be appreciated.

thanks

Steve

Aegis

StillLearning wrote: »

I am looking for a discretionary (investment) management service) for sum just about £900k (50% ISA wrapped, 20% UTs, 30% SIPPS). I have managed these myself for 15 years (with Cofunds, HGL, Fidelity etc..) and a specific asset allocation model both in terms of assets and geographical allocation.

For personal reasons now look to use a DMS. I say this as I am know many in this forum may disparage DMSs as expensive etc.. but now for the future it looks I will need to use one. I have approached 4 directly ( cannot see any reason to approach IFA as they will often work only with one DMS) and sent detailed enquiry.

Does anybody have experience of using for DMS:

• Berry Asset Management
• Cheviot Asset Management
• Seven Investment Management ( 7IM )
• Best Invest (NOT their advisory service but their full investment management service)

Any other suggestion of providers from first hand experience for large large sums would be appreciated.

thanks

Steve

I've met directly with some of the Berry team and various colleagues at work have dealt with the rest of the companies, either introducing clients or taking over as the adviser of a client with an existing relationship, so I can say for sure that none of them are disreputable or fraudulent.

Selection of discretionary managers is a highly personal choice, and you should ask each to prepare an investment proposal for you, outlining their strategy and fees. With the amount you're looking to invest, each should be willing to meet you in person to discuss your requirements in detail. You should look into the relative charges and the differences in strategy. You might also want to look at their performance vs benchmark for actual client portfolios of similar risk to you (typical benchmarks are the APCIMS or ARC figures, and you should be shown a number of time scales and the return vs annualised volatility figures).

It's also worth considering what the manager will invest in for you. Some managers will include ETFs, investment trusts, direct equities, structured equity, etc, while others will only include collective investments, which may or may not be your cup of tea.

Ultimately, however, the decision is likely to boil down to how well you get on with your managers. You can always change your mind at a later date, after all.

StillLearning

Thanks for reply. I have already asked a standard set of questions along lines you suggest and these are posted below as others may find them useful as starting point.

Steve


Questions
1.!!!!!! How long has your firm been in existence and how long has it offered a DMS?
2.!!!!!! Who owns the company i.e. is it the partners / senior staff or is it a third party bank etc.?
3.!!!!!! What are the total funds you have under DMS?
4.!!!!!! How many DMS clients do you have and what is the average value of a DMS portfolio?
5.!!!!!! How many Investment Advisors/Managers linked to the DMS service and how many of these are fully qualified (is it level 4??) consistent with the change in rules at the end of 2012?
6.!!!!!! What online facilities do you offer both in terms of valuation but also in on line archiving of associated documentation?
7.!!!!!! Does your DMS for a new client manage the transfer of current portfolio /assets from current holders? Would these all have to be in cash i.e. resold or where it is appropriate can the actual assets be transferred?
8.!!!!!! What safeguards are in place (3rd party trustees etc..) to protect client assets?
9.!!!!!! Does your DMS portfolio consist only of UT/OEICS or other facilities such as ETF, direct shares etc?
10.!! Do you use any "in house" pooled funds or only third party?
11.!! How many Asset allocation models do you use for your DMS (e.g. classic 3x3 for cautious, moderate, high and income, balanced and growth) and do these match in principle the ARC PCI's?
12.!! After a client is allocated (after the usual planning) to an Asset allocation model will all of your DMS clients in that particular model have the same investments?
13.!! How is the allocation of a particular model decided e.g. by committee, individual etc. and how often is this formerly reviewed? Are any of the decisions for makeup of a model made in house or are external advisors used?
14.!! Does a DMS client have a named advisor and how many of the decision are taken by that individual and how many by group?
15.!! How do you manage ISAs within part of the overall portfolio?
16.!! How do you manage SIPPS within part of the overall portfolio?
17.!! On average approximately what % of contents a Moderate growth portfolio would be change / turned over each year? This will obviously vary.
18.!! Performance and Benchmarking:!!! For individual investors it is extremely difficult to judge DMS between various firms (let alone taking into account cost variation). Most of our shortlisted firms refer at various points to greater r lesser extent to the ARC PCI benchmarking.
a.!!!!!! What benchmarks do you use and provide to your clients regularly?
b.!!!!! Do you include the relevant ARC PCI model figures?
c.!!!!!! Does your firm contribute to the ARC PCI scheme?
d.!!!!! How has your own DMS performance for sterling based Steady/Moderate Risk growth portfolio compared to the ARC PCI figures for the last year and by how much variance? (For reference latest ARC PCI figures below?)

ARC PCI
Year
Yield %
2008
-17.95
2009
17.22
2010
11.92
2011
-4.23
2012 (to date)
5.80
19.!! Costs: The other area it is difficult to assess is costs both in absolute and in terms of performance where they may look reasonable if matching or beating the benchmark e.g. ARC PCI figures.
a.!!!!!! Can you explain your costing structure for a DMS for a portfolio the approximate composition above.
b.!!!!! Is there an initial charge for setting up the portfolio?
c.!!!!!! Are any trail commissions rebated against management costs of the DMS?
d.!!!!! Where dealing costs are incurred and the firm negotiates a wholesale rate is the wholesale rate passed onto the client?
e.!!!!! Are there any specific performance cost triggers.
f.!!!!!! For a portfolio of the XXX and composition on average for a balanced portfolio would be the total expense ratio / cost per year taking into account turnover, dealing costs, management costs and any trail rebates. This will vary from year to year but it is date that is presumably available and will help to put in context the cost of the DMS versus the performance

Aegis

That looks like a very good list of questions, though obviously it will lead to further questions depending on their answers.