The passive investment facility will be built into Parmenion’s online risk profiling and asset allocation process. The strategy will be also available via all of Parmenion’s portfolio wrappers, including ISAs, six offshore bond products and over twenty SIPP providers, with platform charges from 30 per cent.

The Parmenion online risk profiling process generates one to ten risk grades with a recommended weighting in each asset class. Once the recommendations are made, each asset class will comprise a model portfolio of passive funds, which will be predominantly supplied by Vanguard. Because the passive portfolios will be governed by an overriding discretionary management agreement, advisors will have the ability to blend low cost passive portfolios with more expensive active management which will be determined by their client requirements and in-house model.

Using Vanguard funds has allowed Parmenion’s passive service to offer platform and fund charges which the firms says are lower than those usually seen in the industry. The initial fees are 0.25 per cent and portfolio total expense ratios, including all underlying platform and transactional costs, are between 0.41 per cent for very low risk portfolios, rising to 0.71 per cent at the highest risk levels.

“This latest development to our offering really does give an IFA the flexibility to mix and match active with passive investment strategies if required, giving total flexibility for the different needs of their clients. The passive options now also mean that cost is driven right down and a TER as low as 0.41 per cent sets a new standard for the industry,” said Richard Mein, managing partner at Parmenion.