A Managed Portfolio Service (MPS) is a centrally run investment strategy that is tailored to your attitude to risk. It adjusts automatically to ensure the investments as a whole do not become unbalanced and stay in line with your risk attitude. The idea is that you do not have to worry about your investments knowing that if any action is needed, it will be taken automatically.
Financial Planning by TaxAssist has access to a range of MPS investment managers whose job it is to control risk and cost and achieve investment returns for our clients. Delegating the day-to-day running of your portfolio to experienced investment managers ensures that decisions are made promptly and supported by the appropriate level of research necessary to make good, sound decisions. It also reduces the risk of mistakes being made. Due to emotional attachment, novice investors notoriously make errors when investing their own money and mistime the market often buying high and selling low.
Why invest in a managed portfolio service?
A key aim of all investments should be to deliver a return over a medium-term investment period of at least five years in line with the amount of risk you take. The main advantage of an MPS investment is that it enables you to achieve diversification across asset classes, geographical areas, investment sectors, and investment providers. It also provides daily oversight from a professional portfolio manager and you can start with a relatively low initial investment. An MPS offers flexibility, so if your view on risk changes, you can easily move from one risk level to another without having to arrange a new investment.
What are the risks of a managed portfolio service?
As with all investments, there are risks. Risks range from large-scale issues such as wars, and general inflation to smaller more local risks such as an individual company failing. An MPS seeks to reduce these risks through a rigorous centralised investment process and diversification.
How does a managed portfolio service work?
The portfolios are looked after by a dedicated team of experienced investment managers. These investment managers analyse, debate, and refine a broad spectrum of asset allocation views and investment ideas before reflecting their findings in the portfolios. On top of the analysis conducted by the investment managers, an asset allocation committee then determines the percentage of the investment that is placed in each asset class, (shares, bonds, cash, etc.), based on both in-house and external research. This research includes both the big picture (i.e. ‘state of the world’, inflation, political impact on investment, etc.), as well as micro research (sectors, funds, and companies that look promising). Investments that are included in the portfolios are monitored regularly and adjusted to ensure that the original asset allocation is maintained. Risk management tools are used to constantly monitor portfolios.
What are the alternatives to a managed portfolio service?
You could attempt to construct a portfolio yourself as an alternative to a managed portfolio service. Whilst this may well start as suitable for the risk you wish to take and potentially cost less by using tracker funds; most people lack the time and expertise to monitor the investments properly. A managed portfolio service ensures that the portfolio is rebalanced and adjusted as necessary to ensure alignment with your chosen risk level as well as taking into account issues such as charges and poor performance.
How can Financial Planning by TaxAssist help you?
We work with you to choose the most appropriate portfolio for you, based on circumstances, objectives, and appetite for risk. We look to understand your needs so we can select a managed portfolio service (or services) that has/have the potential to deliver the specific outcomes you require. We will regularly monitor and review with you to make sure everything remains on track. We will also maintain an overview of your financial situation, making sure you are maximising tax opportunities and providing you with fresh planning perspectives that you may not have considered.
Find out more
Speak with our team of friendly expert planners to book a consultation that is free to you by calling 0330 441 2244, completing our enquiry form, or emailing [email protected]