Alan Miller returns to the retail market

Alan Miller’s wealth boutique SCM Private has opened its model portfolios to the retail market.

SCM has facilitated this by listing its Long Term and Absolute Return models – previously only available to high net worth investors at a minimum investment of £250,000 – on the Praemium Discretionary Platform Service (DPS).

The portfolios invest in a basket of exchange traded funds and Miller (pictured) describes them as being ‘actively passive’ in that he makes regular asset allocation calls. To demonstrate this he points out turnover on the Long Term portfolio is typically 40% and stands at 69% on the Absolute Return portfolio.

Miller left fallen investment firm New Star under a cloud of controversy in 2007, and when he launched the SCM portfolios in June 2009 they were generally greeted with scepticism by the investment community, especially as he used the launch to attack the charges associated with active fund management and the cult of the star fund manager.

However, Miller, who built his reputation during a nine-year stint on the Jupiter Special Situations fund, appears to be confounding his critics. According to SCM, the Long Term portfolio had returned 28.9% up to the end of October versus a 25.6% gain in the IMA Balanced Managed sector, while the Absolute Return portfolio has returned 24.4% versus an 8.2% rise in the peer group.   

Through the arrangement with Praemium the annual management fee on the fund (plus VAT) will fall from 0.75% to 0.5%, with SCM waiving performance fees in full. 

Miller believes the low total expense ratio on the portfolios makes them ideal for the retail market. He said investors can save between 33% to 48% of the total costs of the investment on the average balanced managed fund of funds or absolute return fund.

He said SCM had chosen Praemium because of its ‘unique’ method of pooling all the individual client deals together, which means SCM could cut costs on the portfolios. ‘We’ve had a lot of people saying to us “we love the way you invest but we wish we could invest at a lower minimum”. It’s been very frustrating to have to turn business away.’ 

He added: ‘By accessing us via the Praemium DPS Select platform, advisers can retain complete control of the relationship with their clients, their assets and their chosen manager. We are very pleased to be able to roll out our offering to enable investors to achieve more for less.

‘There are only a handful of platforms which offer clients the ability to actively manage model portfolios, as most of the larger platforms were built with funds in mind. We don’t want to be a fund, and want investors to have everything in their name and be able to see what they legally own.’