Asgard to cull manager list with $200K-a-year preferred partner program

Asgard has acted on its wish for “fewer, deeper relationships” with funds managers, inviting 20 of them to tender for a “preferred partners program” that will ask for $200,000 up front per annum, in return for greater access to affiliated financial planners and a guaranteed slot on the Elements multi-manager funds.

Between eight and 12 “preferred partners” will be announced by early October, according to Asgard chief executive, Geoff Lloyd. These partners will win the right for two or three of their funds to be included across Elements’ diversified and single-sector options (down from the 22 managers previously represented), as well as exclusive access to around 900 Asgard-affiliated planners at professional development days and conferences, consideration for the Advance Asset Management multi-management line-up and St George Private Bank margin lending program. The $200,000 per year partner fee will be offset against the rebates paid by each manager to Asgard. Some of the larger managers on the Asgard list probably pay more than this in rebates already. The rebates to Asgard on new inflows are set to increase for all managers, with Lloyd confirming the partners tender had asked for “;institutional-like rates”; to allow for a bigger difference on the retail rates to be passed back to Asgard. Lloyd stressed that rebates currently received by end-investors would not be affected. The preferred partners selection criteria would be “not just price-led”, according to Lloyd, and would incorporate feedback from Asgard state managers around the quality of each firm’s communications, participation in planner events and product innovation. The quality of their administration, including history of unit pricing errors, would also be assessed while assuring selection of best-of-breed managers across the necessary spread of asset classes. An RFP has been sent to all the managers on the Asgard pre-mixed options to assist the selection and negotiation process. “This is a natural evolution of the way we do business,” Lloyd said. “We’ve never charged shelf space fees…we’re interested in having fewer, deeper relationships with managers, and at a time of high margin pressure, they’re telling us they want disintermediation too.” Some smaller and mid-tier managers have privately complained that the new program prices them out, and compromises the integrity of the Elements pre-mix options. However, Lloyd said Elements would retain a “satellite” system of up to 10 non-partner managers, while the Asgard eWrap and Advance master funds would continue to have open menus. He predicted high-quality start-up managers who “;backed themselves”; would profit from taking the plunge and signing up as a preferred partner. With the quality of the partnerships continually reviewed, Lloyd said the benefits to Asgard investors would be an “administrative uplift”, better-quality roadshows and assured access to innovative products.