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Created on Monday, 17 September 2012 09:41

Parmenion, provider of investment management, technology and administration services to Financial Advisers, has been awarded 'DFM Platform of the Year' at The Investment Adviser Platform Awards 2012.

Voted by approximately 250 Financial Advisers, Parmenion is the first provider to receive the Award, following the category being introduced this year. The Award was judged on a range of criteria, including: technological support, pricing, range of product and services, and usability.

The Award win follows Parmenion recently being voted as ‘TheBest Emerging Platform' in The 2012 CoreData Investment Platform Study.

Richard Mein, Managing Partner at Parmenion, said:

“There is growing recognition amongst the adviser community for the need to have an outstanding investment proposition at the heart of their business, especially with RDR fast approaching. With compliance and administration burdens set to increase, Financial Advisers will have to juggle a number of requirements while still providing clients with tailored investment solutions that accurately reflect their needs.

“At Parmenion, we have been supporting our clients with investment management, slick technology and quality administration services since 2007.  The recognition from Financial Advisers is evident in the 70% increase in new business over the last year.

“We would like to thank those who voted for us to win this Investment Adviser Award, and will continue to enhance the services we provide to Advisers to ensure they are meeting their ever evolving requirements.”

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Created on Tuesday, 21 August 2012 14:22

Parmenion, provider of investment services to financial advisers, has today been voted ‘The Best Emerging Platform’ in The 2012 CoreData Investment Platform Study. 

The study is an annual syndicated study aimed at delivering administration providers key insights into the shifting demands of independent financial advisers (IFAs) and comprises an array of empirical data that identifies developing trends in the market. 1,245 Advisers took part in the research.

In addition to being The Best Emerging Market Platform, Parmenion was also commended in The Overall Platform section of the study.

Richard Mein, Managing Partner at Parmenion, said:

“The Parmenion investment service has been designed specifically to enable advisers toembed a flexible investment proposition into their business. This gives them more times to spend with clients and run efficient, scalable and profitable businesses. 

This latest award is testament to the outstanding range of services that we provide to   financial advisers and in the run up to RDR it is important for advisers to work with businesses that will continue to change to suit their ever changing needs.”

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Created on Wednesday, 15 August 2012 13:27

Amid the Eurozone crisis, fiscal austerity in the UK and talk of a  possible slowdown in China, it has been easy for big-picture investors to overlook the attractions of UK commercial property which has some unique investment features making it an essential holding for any diversified portfolio.

The table below shows the average annual returns, volatility and correlations between the International Property Databank (IPD) UK Property, the FTSE 100 and UK Gilts All Stocks indices for the 20 years to December 2011.

Even though the FTSE 100 has produced lacklustre returns since the collapse of the dotcom/year 2000 boom, over the longer period it is ahead of commercial property and Gilts. However, as with all return figures, it is vital to compare volatility and it is on this measure that property shows its real worth. It is much less volatile than the stock market and only just more volatile than Gilts. Indeed, every percentage point of return is achieved with much less volatility.

Another plus point for property is its role as diversifier in a multi asset portfolio, as the figures for correlation between the FTSE 100, Gilts All Stocks and the IPD indices show. Property actually has negative correlation with Gilts and hardly any correlation with the FTSE 100. By including an appropriate weighting in a portfolio, its overall risk/return characteristics can be improved.

Total return, Volatility and Correlation for the 20 years to December 2011

Source: Financial Analytics and Parmenion

Property and property funds have some unique features that distinguish them from mainstream share and gilt funds. Commercial property is different from the equity market in one important respect; it is an illiquid asset. Property takes a long time to build and to sell to realise the proceeds. There is no central marketplace or exchange to buy and sell property and to fix a continuous price. Often the values of transactions are not revealed if they are private and the valuation of a property portfolio or fund is determined by independent surveyors. This illiquidity can cause problems. Following the credit crunch in 2008 some property funds suffered a wave of redemptions as investors wanted their cash. Some funds had to limit redemptions because it took time for them to realise cash from the properties to pay out investors.

Of course when buying any fund, the return will be determined by the skill and good fortune of the people in charge, the fund managers. It is up to them to build, redevelop, buy, negotiate and lease the underlying land and buildings. The managers of these funds are often qualified surveyors who have the skills and experience in managing this particular type of asset class. Not only is buying at the right price important but further value can be added once a property has been bought.  The team can add value by upgrading and refurbishing property in order to increase rents. Buying in the right location and finding the right type of property and tenant will also affect performance. A portfolio with too much secondary property* over the last few years will be unlikely to have seen values rise. Conversely paying too much for a City of London office building is also unlikely to add value. It does no harm to look “under the bonnet” of a fund and examine the geography and type of property it holds.

(* Secondary property is not prime property, i.e. it will not attract the highest quality tenants, the building and the location. In particular the latter defines secondary; it is property not in the nest location to attract the highest rents and tenants.)

As investors in shares have discovered in the past ten years, asset prices can move in cycles which may extend for long periods of time. It is no different with the property market.  The Centre for Economics and Business Research (CEBR) has neatly summarised the four stages of a property cycle. First, property values fall as demand falls away, businesses do not expand and banks are unwilling to lend, resulting in falling rents. Second, prime property like the City of London and the West End provide a floor in prices with investors often from overseas, taking a long term investment outlook. The next stage is a flight to quality with only the best space seeing rental increases. Finally, secondary market locations begin to rise in value, availability of finance is easier and investors begin to look further away from prime real estate owing to a lack in investment opportunities available.

Recent numbers suggest we are between stages two and three. Although overall property returned 7.8% in 2011 (Source: IPD) there was a difference in return between London and the rest of the country. London has undoubtely benefitted from its “safe haven” status. The City office market returned 12.8% for 2011, closely followed by West End retail at 12.7%. There also continues to be a difference between property locations; those properties let on long leases to good quality tenants, and secondary property. It is unlikely that the regions and secondary property will see any improvement in values until economic activity and confidence improve across the whole of the UK economy.

Commercial property should form part of a well diversified portfolio not only because at times its performance is likely to be better than other asset classes, but also for its important role as a less volatile, diversifier of risk.

Be aware that prices do move in cycles and some due diligence is necessary before buying a fund. Look at the type and location of the properties in which it invests and do read the managers report, it always interesting to get the views of the people actually in charge of your monies. 

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Created on Friday, 03 August 2012 09:24

Parmenion, provider of investment services to Financial Advisers, has announced the appointment of Gordon Jackson as Regional Sales Manager for Scotland and Northern Ireland.

Gordon previously worked with Standard Life as a senior consultant in Glasgow, before taking up a business development role working with banks and wealth managers in Scotland, Northern Ireland and North East England.

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Created on Thursday, 28 June 2012 09:02

Parmenion, provider of investment services to Financial Advisers, has today announced that it has introduced a market leading tiered charging structure for its Administration and Custody Charge.  The existing 0.30% charge will be replaced with a tiered scale which slides from 0.30% down to 0.15% depending on the size of an individual client’s portfolio.

The sliding scale is based on the entirety of an individual client’s portfolio, for example once the portfolio exceeds £300,000 there is an immediate benefit with a reduction from 0.30% to 0.25% and similarly for portfolios in excess of £1.5 million, clients will pay no more than 0.15% in total.