Beacon drops Frank Russell for InvestorWeb

Beacon Investment Management Serviceshas dropped the lFrank Russelgroup in favour ofInvestorWebas the asset consultant for its multi-manager Model Choice investment options in an effort to reduce costs and boost the investment performance of the Beacon Master Trust.

Beacon managing director Kevin Wyld says the switch to InvestorWeb would reduce the management expense ratio (MER) in the superannuation and allocated pension accounts of the master trust by between 0.3 and 0.4 per cent per annum.

Wyld says the locally owned InvestorWeb would also bring a degree of familiarity to the managers underlying the Model Choice portfolios, a missing ingredient for financial advisers under the global Frank Russell group.

“A lot of financial planners didn’t use [the model portfolios] because they didn’t recognise the managers underneath. That slows down sales. But the change [of asset consultant] is mostly about getting fees down and increasing performance,” Wyld says.

According to Wyld, the model portfolios to be offered by InvestorWeb have returned between 8.35 per cent (for the capital stable option) and 16.76 per cent (for the growth option) per annum over the last three years.

Under the contract with InvestorWeb, the multi-manager portfolios will be reviewed on a six monthly basis, with adjustments to asset allocation and fund managers made accordingly.

The change in asset consultant for Beacon will also coincide with an across the board cut of up to 10 per cent in the administration fees for the Model Choice portfolios.

Wyld says the fee cut would enable the Beacon master trust to compete with retail managed funds.

“The reduction in both administration fees and MER’s is just another step forward in building the Beacon business,” Wyld says.

According to Wyld, Beacon will also add a number of new funds to its master trust menu from July 1 this year.