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Why RSMR launched its own investment platform

ABR editor Rob Kingsbury spoke to RSMR founding director Geoff Mills about the launch of the firm’s investment platform

It takes the courage of conviction to launch a platform in the current market. The catalyst for Rayner Spencer Mills Research (RSMR) launching its own investment platform, says founding director Geoff Mills, was the time consuming process of trying to get the firm’s rated portfolios onto existing platforms and finding some platforms simply weren’t able to facilitate the portfolios.

“So we decided that the best way to give advisers easy access to our portfolios was on our own platform,” he says.

To achieve this without an expensive build, RSMR has used software and technology company Hubwise, which provides a white-label platform solution.

RSMR now hosts its seven risk-aligned portfolio – Rfolios – on the platform and offers advisers combined research and platform services at a cost of 25bps. “We think that is very competitively priced and Hubwise is able to offer a tiered charging structure for larger volumes of assets,” Mills says.

Alongside the seven portfolios, platform users get access to the RSMR’s list of 340 researched and rated funds, as part of the full universe of around 2,500 investments available on the platform.

“The option is there for the adviser. They can use our portfolios, purpose built from our range of rated funds, or they can make their own choice from the 340 funds that have been through our rigorous research process to create their own portfolios. If they then want to add in funds from the larger universe they can do that too.”

What makes the Hubwise powered platform different from others in the market, Mills says, is that the underlying clients remain with the adviser firm, rather than the sovereignty lying with the platform.

Alongside the transactional trading and rebalancing facilities, the platform offers a risk profiling tool, and additional functionality such as Campaign Manager. This is an email-based system that makes it easier for advisory firms to communicate with clients around changes to the portfolios. It is technology driven and is trying to remove a lot of the labour-intensive and paper-based processes when rebalancing or a fund change takes place, Mills explains.

“Campaign manager makes it easier to communicate changes to advised investments and get back confirmation from the end investor. It is a smoother, slicker process for advisers and Hubwise is looking to make the process even slicker so change notifications are sent automatically to clients on behalf of the advisers to help remove the paper chase altogether,” he says.

To assist adviser firms looking to use the platform, RSMR provides a due diligence document on the platform, “going into all the areas we think an adviser would ask of us”, Mills says. Hubwise has a similar document that advisers can access.

One of the reasons the firm chose Hubwise, Mills says is that the directors come from an IT background rather from a financial services background. “We found it refreshing that they look on our industry quite dispassionately and are not constrained by legacy issues in financial services. They are looking at it from a technology and adviser firm perspective and create functionality that best supports the adviser’s business rather than being an asset management company or a life company that has morphed into a platform.

“Technology is redefining the way that adviser businesses are operating and we wanted to give advisers access to our portfolios on a platform that is using the developments in technology to help advisers improve their business processes.”

Three research offerings

Set up in 2004, RSMR provides independent investment-focussed research for advisers offering three service types.

1. RSMR Select – a bespoke service tailored to individual advisory firms’ requirements, including bespoke portfolios.

2. RSMR Plus – a subscription-based service providing access to the seven model portfolios.

3. RSMR Direct – a ‘free to view’ channel that offers access to the firm’s set of ratings and guides and information, branded as the Research Hub.

Options 1 & 2 are priced according to the breadth of work being undertaken for the adviser firm.

Describing the investment process Mills says: Every quarter we look at all the Investment Association (IA) sectors on a rolling basis.

“We draw down stats on every fund in that sector, using FE Analytics, and look closely at the performance over agreed periods, s well as the risk measures and ratios.

“We look at whether rated funds are still performing as expected and whether others warrant being put on watch list.

“On the qualitative side, we have an internal committee that looks at the funds that have come through the various performance measurements, the experience of the manager and the team, and the way the fund is being managed and make a decision on whether it is one to take forward; if so they will then interview the fund manager. Once we’ve been been through all these measures we will rate the fund.”

The firm currently rates single strategy funds, passive funds, multi-manager and multi-asset ranges, SRI funds and investment trusts.

With the regulatory onus on the adviser firm to demonstrate suitability, preferably through a consistent and repeatable process, and that it has done proper research and due diligence on the funds, services and providers it uses, advisers could do it all themselves Mills says, “but you have to put the resource in and if you are a financial planner that isn’t necessarily your strength. By outsourcing it to a firm like RSMR, you bring in the expertise and free up internal expertise to focus on the client relationship and financial planning.

“Adviser firms can buy into a process that has a clear methodology and which is reviewed and monitored by people who are doing nothing else but this. We have a well-respected reputation in the market place but it is the depth of our research that can make the difference for a firm.”

The firm also provides due diligence to help with selection of funds, platforms and discretionary fund managers (DFMs).

Visit the RSMR website


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