Evelyn Partners has launched a Cash and Cautious Bond strategy for the adviser market.
The new offering is an active discretionary portfolio management service investing in a selection of “liquid, high-quality and low-risk” cash-like securities and shorter-dated bonds.
The firm aims to beat the returns available on cash accounts, within its lowest possible risk rating of one out of seven.
The portfolios can be tailored to individual clients’ timescales and drawdown needs, while also offering the potential for tax-efficient returns.
The ongoing fee is 0.15% per year, covering both portfolio management and custody. All assets are held in nominee accounts. The firm recommends a minimum subscription of £500,000.
See also: Two thirds of advisers involved in family bust-ups over IHT
Matthew Spencer, head of Intermediaries at Evelyn Partners, said: “Our Cash & Cautious Bond strategy has been a widely welcomed solution over the last couple of years for direct clients of Evelyn Partners looking for a home for substantial cash balances.
“Savings accounts are already seeing reduced returns, and with central banks expected to continue to cut benchmark rates, as we saw last week with the latest reduction by the Bank of England, this is set to continue.
“There’s a window of opportunity for financial advisers to lock in elevated short-term bond yields for their clients as part of a diversified and low-risk strategy.
“Current global economic uncertainty and volatile equity markets mean many clients are also looking for somewhere to earn an enhanced return compared to cash, while they wait until the macroeconomic outlook becomes clearer before putting money to work in riskier assets,” he continued.
“Cash accounts can also leave clients exposed to tax on interest, with additional rate taxpayers having no personal savings allowance and higher rate taxpayers only able to receive £500 of interest tax free each year. The Cash & Cautious Bond service can provide an element of tax-efficiency through the inclusion of bonds that are exempt from capital gains tax.”
See also: Jump in FOS complaints to 141k is ‘an unnerving trend’
Ian Kenny, investment management partner and head of fixed Income, added: “Interest rates and bond yields have been on quite a journey, moving from all-time lows to decade highs over the last few years, and that has fundamentally changed the landscape for savers and asset allocators at the short end.
“Now is a great time to be having conversations about cash or near-cash to make sure that cash balances are well-mapped to need and preference and are working as hard as they can be.”
