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Outcome Tax?

Summary

I hope you are able to find this email before your inbox is awash with Autumn Statement prediction emails and in among those rather annoying ‘Black Friday deals’ messages – for me, I can only think about Christmas when the month begins with a ‘D’ which alarmingly is only a week away.

I hope you are able to find this email before your inbox is awash with Autumn Statement prediction emails and in among those rather annoying ‘Black Friday deals’ messages – for me, I can only think about Christmas when the month begins with a ‘D’ which alarmingly is only a week away.
So as we await tomorrow’s Autumn Statement and the ensuing tidal wave of emails dissecting its contents, my attention was drawn to a couple of yesterday’s announcements from two leading fund management groups.
Firstly, JP Morgan Asset Management’s decision to liquidate its Fusion range after it had only mustered £54 million in assets which has to be seen as disappointing given their distribution capability and that performance wasn’t too bad.  Secondly AXA’s announcement that it was reviewing its UK wealth business in the light of increased regulation. This would include the Architas range of funds.  Both Fusion and Architas are fund of fund structures.
Contrary to the opinion of many, the delivery of clients’ outcomes after fees is key and the crux of the investment proposition. If that can be delivered with reference to something that investors can relate to – namely inflation – then that is a relevant outcome. It is arguably more important than whether the objective is constructed via direct investments or a select group of consistent return-focussed managers who share our passion for client delivery over asset gathering. Put together in a UCITS structure housing appropriate asset allocation looking beyond convenient geographical and asset class labels would seem to offer the end investor a potentially more transparent solution than more opaque yet popular DFM structures.
Many comment that our solutions are not too numerous and would be hard to construct without the requisite research. Neither could we replicate them in DFM structures which is why we have eschewed that path to garner asset growth as it may not deliver the optimal investment solution for clients.
Gone are the days when a fund of fund structure was viewed as a way to put a bunch of household fund names together to gain assets but using others’ investment capacity.
We believe our construct and focus on relevant, understandable yardsticks is a viable methodology to deliver what clients seek – after fees. Outcome-based solutions built that way as an outsourced investment proposition are directly comparable to other constructs and delivered consistently net of fees, shouldn’t be taxing.

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