MSCI intends to build on its selection by the WMA to supports its private investor index series as it looks to enhance its presence in the UK wealth management industry.

Index provider MSCI’s achievement in winning the provide the data for the the Wealth Management Association’s Private Investor indices was a crucial step in this international firm expanding its reach into the UK private wealth market, an executive at the organisation says.

Early in September last year, the Wealth Management Association said it had agreed with MSCI for the latter organisation to be the new data provider for its Private Investor Index Series, replacing FTSE. The WMA members collectively oversee £734 billion ($962.8 billion) in client assets, so the deal is a feather in MSCI’s cap.

The Private Investor Index Series is a set of multi-asset class indices that indicate the returns investors might expect from portfolios, and were launched in 1997. The new agreement takes effect from 1 March. 

The new MSCI WMA indices will reflect a wider range of data and additional forms of investment under the new arrangement, Steven Kowal, executive director, index product group for Europe, Middle East and Africa at MSCI, told this news service. 

“The range of strategies available to wealth managers in areas such as smart beta, real estate and ESG is ever increasing, allowing them to more precisely tailor client portfolios. The benchmarks they use need to evolve in conjunction with these developments,” he said, adding that MSCI intends to continue exploring opportunities to expand its range of offerings in the UK wealth market.

MSCI is an international business and its global reach and experience are qualities that will have appealed to the WMA, he said. “International and global equity indexes are our calling card and what we do best,” Kowal said. “Increasingly, we see wealth managers allocating in a less home-biased, more globally balanced way and so developing private wealth indices that better reflect this is something we envisage as a natural next step.”

Kowal, who has been with MSCI for the past three years, said it was “strategically critical” for his firm to be competitive in the UK wealth management market. “We needed to do something that was a bit of a game changer,” he said, referring to the WMA deal.

“The WMA happened to be reviewing their suppliers and identifying a firm very committed to working with the wealth management community on an ongoing basis was an important criterion,” Kowal added.

As it described in September last year, MSCI said it will offer a series of flexible multi-asset class indices that will be augmented and enhanced over time based on the changing needs of the private client sector. The WMA is talking to its members on how its traditional indices can be refined, as well as exploring how MSCI can come up with new indices, it said.

The change in provider followed a lengthy project undertaken by the WMA’s Private Investor indices committee, which is made up of representatives from member firms, in which it considered those requirements and changes deemed necessary to ensure the Private Investor Index Series remain credible, useful and relevant to the wealth management community.