A new back-office investment service for “independent minded” financial advisers has attracted about $235 million of initial commitments, according to Nick Stewart, head of Hastings-based Stewart Financial Group (SFG).
Stewart, who helped set up the new Boutique Advisers Alliance (BAA), said five upper North Island advisory groups have begun using the service, which administers a range of passive-style model portfolios via a discounted Aegis investment platform.
He said the group was aiming to sign up at least 20 advisory firms.
While the BAA models feed into products managed by mega US passive-style firm, Dimensional Fund Advisors (DFA), Stewart said the system was flexible enough to accommodate other investments if required.
“Some BAA advisers may want to run other strategies,” he said. “But our aim is to work with advisers and firms that are client centric, structured passive in philosophy and fee only.”
The DFA portfolios form the backbone of the new service, with an investment committee (an SFG advisory team and NZ Institute of Economic Research principal economist, Aaron Drew) charged with testing and researching the models.
“BAA provide portfolio models produced from its investment committee along with regular assessment and third party due diligence in line with CEFEX [Centre for Fiduciary Excellence] standards,” Stewart said.
SFG was recently approved by CEFEX, an “independent global assessment and certification” for investment fiduciaries, according to its website.
“While SFG is CEFEX approved BAA is not,” Stewart said.
As well as SFG, Auckland-based Cliffe Consulting and Strategic Wealth Management, headed by Alex Fowler, have signed up to BAA.
“Advisers who work with us come under our ICSL [Investment Custodial Services Ltd] institutional contract and benefit from the reduced rates negotiated with Aegis,” Stewart said.
“BAA runs all AML through our process and can perform rebalance and reporting options including detailed multifactor reporting.”
He said the group was targeting like-minded advisers who want the benefits of belonging to “a larger organisation without having to give up their identity or branding in the process”.
According to Stewart, advisers are not contractually-bound to BAA, which pays “cost recovery” to SFG for running the service. Investors are charged a monthly admin fee.
BAA is set up as a separate company from SFG, he said. The service will also administer the DFA-backed ‘Asset Class’ KiwiSaver portfolios, now managed via the Grosvenor scheme.
