As promised in my e-mail on this subject last week, I am writing today to provide you with some more information on the decision by EBI to apply Environmental, Social and Governance (ESG) screening to all their Portfolios and also, the move from the EBI Vital to EBI Vantage service.
I will provide some more information on the Vantage service first.
The EBI Vantage Service
I don’t intend to retype the contents of my earlier e-mail but in brief summary, the Vantage service provides for automatic rebalancing, automatic fund switches (when appropriate) and it reduces the amount of paperwork clients will need to sign. Hitherto, this service was available only at additional cost but as EBI has grown, it has been able to negotiate access to institutional fund classes which has led to cost reductions. The end result of this, is that Vantage is now cheaper than the Vital service which we are currently using.
The following table highlights the approximate cost savings for each Portfolio:
OCF stands for ‘Ongoing Charges Figure’ and is expressed as an annual percentage. The figures shown represent the total annual cost of the Investment Portfolio(s) but do not include charges to Clearwater (which are not changing) or wrapper costs.
An average saving of 0.05% per annum might not sound a great deal but for a Portfolio valued at £500,000, this equates to £250.00 per year, which I am sure most people will be able to find a better use for.
Moving to Vantage essentially means you will be getting more for less, and let’s face it, that doesn’t happen very often!
Turning now to the inclusion of ESG screening in all of the above Portfolios:
ESG
As above, I will not go over the content from the previous e-mail again but I have provided some links to our website below where you can find more information.
ESG Investing - ESG Screening
This is an easily accessible infographic which explains concisely what ESG means.
ESG Investing – Traditional vs ESG Portfolios
This infographic highlights the key differences between the old approach and the new.
ESG Investing – Asset Allocation
Using Portfolio 60 as an example, this infographic shows how assets will be allocated within the Portfolios.
Earth Portfolios Brochure – 2021
This is a more detailed look at the principles behind ESG screening.
Summary
In very brief summary, the changes proposed are entirely positive, they will definitely lead to lower charges and it is hoped, higher returns. I have no axe to grind at all here, we (but not you) will be involved in a quite a lot of work implementing these changes but we will be receiving no additional fees whatsoever, our sole motivation, as it always is, is wanting to do the right thing for our clients.
There is nothing for you to do at the moment; I will be writing to you again in around mid-April, when the new Portfolios will be fully available. There will be one form for Transact Investors to sign but no form is required if you are invested on the Standard Life Platform, we will just need confirmation via e-mail that you are happy for us to effect these changes on your behalf.
I am very excited about these enhancements to our investment proposition and I will be first to be making the change, but if you do have any questions or concerns, please do not hesitate to get in touch.
Yours sincerely
Graham Ponting CFP Chartered MCSI
Managing Partner
