Shadforth developing C and D client offering
Shadforth Financial Group is in talks with platform providers and fund managers to offer low-cost enhanced asset class (EAC) investment options to low-value clients.
The move comes as dealer groups scramble to develop offerings that will allow them to service clients with low account balances in the post-FOFA environment.
"Over time we'll come up with service offerings that are product agnostic and are not commission-based or revenue-sharing, but based on an advice fee structure," said Shadforth head Nick Bedding.
Multi-sector EAC investments allow financial advisers to target asset classes based on a client's risk-return profile at a relatively low cost, said Bedding.
"It's not indexing, because you use tilts towards value and small cap stocks - and you have a far more diverse asset allocation," he said.
Effectively, EAC investments allow advisers to offer clients with a low-cost, risk-adjusted return portfolio that is tilted towards asset classes "that are shown to outperform over an extended period of time", said Bedding.
Shadforth clients are also provided with two in-house implementation services, said Bedding: a rebalancing service and a "dynamic portfolio update" (DPU).
The rebalancing service is a managed discretionary account that allows clients to proactively manage their portfolios, he said.
"With the DPU we write to our clients every six months with a review of their portfolio recommending changes to the asset allocation, and if there's an issue with an underlying holding we'd recommend changing that," Bedding said.
Shadforth announced the acquisition of the advice practice Life Financial Services, based in Ballarat, earlier this month.
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