Over recent weeks I’ve had numerous conversations with advisers looking to review their centralised investment proposition in light of PROD. After banging on about it for several months it would appear my message is getting through! These advisers are completely rethinking their segmentation strategy, then taking a blank sheet of paper (i.e. stepping back from any existing provider relationships) to identify those best suited to addressing specific client needs.
This approach has led several to realise that the DFM panel they’ve had in place is not sufficiently diversified to meet a wide range of client needs.
One adviser said:
“We recently worked on a project to map the solutions required to support the needs of our different segments. It comes as no surprise that there are gaps. From a DFM perspective, we’ve tended to work with the bigger players (the adviser’s DFM panel consists of five well known brands) although through this exercise we’ve realised that the solutions on offer are very similar. There is very little differentiation.”
As a result, advisers are on the hunt for alternative solutions. We’ve witnessed this first hand via the DFM searches on our site. There has been a notable surge in research including smaller, boutique players (this article nicely sums up what boutiques can bring to the table).
One such player is RC Brown. They are a boutique DFM and they stand out from the crowd in many ways, particularly for democratising the use of DFM. If you don’t know much about RC Brown, read on for five little known facts about the business.
Five little known facts about RC Brown
1. Low minimum investment
RC Brown’s discretionary investment services are offered for a minimum investment of just £15,000. In the early noughties the business changed strategic direction (read about it here) to make their services more accessible to retail investors. This involved streamlining the way that they operate; refining their systems and processes to create scale without compromising their strong focus on client service. As a result, RC Brown tend to be used as the core investment proposition for an advice firm. This means they offer solutions to the lion’s share clients, rather than just a handful of investors at the very top end (as is often the case for more traditional players).
2. Low and transparent charges
RC Brown are passionate about fair and transparent fees for discretionary management. In fact, they’re quite vocal advocates. Their charging options are either:
» Performance Fee. The performance fee option is charged at 0.625% for portfolios up to £375,000 and 0.40% for those over £375,000. A performance fee is applied, charged at 20% of the portfolio’s annual return, when the return is above 4%.
» Conventional Fee. The conventional fee option is levied at 1.25% for portfolios up to £375,000 and 0.80% for those more than £375,000 in value.
The charges quoted are all-in, so dealing, transaction, admin, trust and custody fees are included. To further illustrate their commitment to fee transparency, last year RC Brown launched a cost calculator on their website, which you can access here. It generates ‘live’ estimates of the all-in annual cost to the client.
3. Digitally enabled
RC Brown has invested significantly in its digital proposition. Their client portal has impressive functionality and gives access to:
» Daily portfolio valuations
» Up-to-date transactions
» Secure messaging for client instructions, which is encrypted end-to-end
» A breakdown of all holdings in the portfolio
» Historic valuations and charts
» Asset allocation information
» Quarterly reporting, ad hoc reporting, tax packs and other correspondence
» Available via an app on desktop, mobile and tablet
The portal also streamlines the production of their quarterly client reports – they can now produce 12,000 reports in just 11 seconds! This process used to take several days and require the services of an external printer. Today the reports are distributed directly and securely to each client’s individual document library.
4. Institutional investment edge
RC Brown’s heritage is in the institutional investment arena. This foundation has enabled them to build strong relationships with key brokers in the City who actively approach them with wholesale investment opportunities. As a result, RC Brown gain access to IPO’s, rights issues, placings by companies (to raise new share capital) and known sellers (usually a key person within the company). These opportunities are applied across all appropriate Private Client portfolios, as well as their institutional book, giving them an investment edge.
5. AIM and IHT portfolios
Earlier this year RC Brown entered the IHT Portfolio space, in response to client and adviser demand. However, while their Inheritance Tax Investment Service is new, the team draw on experience in the AIM market that spans more than 20 years. You can find out more here.