Elston Consulting | Best Investment Consultant
Henry Cobbe, Head of Research at Elston Consulting, explains the firm’s winning ways in the 2024 IAM service provider awards.
What is the size and scale of your business at the moment?
We consult to adviser firms which have approximately GBP6 billion of assets under advice. Of this approximately GBP1.3 billion is in ready-made or adviser-defined custom solutions managed by Elston Portfolio Management.
Additionally we provide consultancy or benchmarking services for approximately GBP300 million of funds. Our head office is in London, but our client base covers the whole of the UK. Our core business is supporting UK financial advisers and their investment committees, whether that’s helping to develop a robust advice process, reviewing their Centralised Investment and Retirement Proposition, or offering adviser defined custom MPS service or using ready-made solutions from Elston Portfolio Management.
We were founded in 2012 and worked exclusively with providers until 2020 designing solutions for the adviser market. From 2020 we have started working directly with advisers to help them insource investment capabilities, and things have mushroomed since then. We are fast-growing both in terms of our client base, assets under consultancy and our own team.
What trends have you seen over the past year?
We see a structural shift in the adviser market.
In addition to growth of assets on platforms, there is a pronounced shift to discretionary MPS.
The first wave of this has been to off-the-shelf solutions from DFMs. But for firms that still want involvement and say in how their portfolios are run, we see “Custom MPS” as being a growth area. Directly or indirectly, we have been helping advisers with Custom MPS since 2018 following the introduction of PROD rules. On our estimates, Elston is the largest Custom MPS provider by AUM with GBP1.1 billion in Custom adviser-defined mandates, which is substantially more than some household name DFMs for whom Custom MPS is a new thing. Custom MPS is what we pioneered, and we aim to stay ahead in that space.
What plans do you have for growing your business over the coming year?
First and foremost we endeavour to offer exceptional service to all our current adviser clients. This is what our clients value most: to be a genuine investment partner that is not only delivering on existing solutions, but innovating with new solutions. When you are confident that you have a modus operandi that works for them and delivers results, not only does that give us the confidence, but also the credibility to win new business. Staying ahead of market developments, as well as robust investment process aiming to deliver relative outperformance – all of this matters. The regulatory burden on financial advisers is considerable and growing. We ensure that we are always up to date with regulatory changes and developments and tailor our solutions accordingly. For example – we launched our Retirement Portfolios back in 2021 in anticipation of the Thematic Review on Retirement Income, so these purpose-built decumulation portfolios will have their four year anniversary in March.
Where do you see the institutional investment industry going over the coming year?
We have institutional capabilities but our clients are retail financial advisers. We see the biggest challenge for fund houses being to decide whether they are commoditised component providers or value-add solution providers. We first articulated this strategic choice in 2012 in an article for CFA Magazine. It remains as relevant today.
How will your firm be able to support them?
Our aim is to help UK advisers deliver robust, disciplined, institutional quality investment solutions for their clients. We aim to provide a comprehensive investment engine to help them do just that.
