Psigma Investment Management, the UK-based asset manager, has announced it is halving its annual management charge to 0.5 per cent (excluding value added tax) and cutting its minimum portfolio requirement to £50,000 ($76, 372) in the wake of the recent re-launch of its discretionary service for smaller clients.

The service, which is now only available via intermediaries, aims to cap the managed portfolio service total expense ratio – a figure capturing the overall cost of overseeing client money – at 1.35 per cent.

The changes come against the background of the recently-enacted Retail Distribution Review programme of reforms that are designed to increase the standard of professionalism in wealth management and stamp out the use of trail commissions. As a result, there has been business consolidation and advisors are outsourcing investment decision-making to external firms.

“We are determined to support intermediaries in this new RDR world and particularly those who are looking to outsource their clients’ investment requirements,” John Howard-Smith, chief executive of Psigma, said in a statement.

“We believe that our investment service offers institutional investment management for retail clients with a primary focus on achieving 'real' returns in excess of inflation,” he added.

The managed portfolio service comprises four options and target returns: Cautious (inflation +2 per cent); Balanced Income (inflation + 3 per cent); Balanced (inflation + 4 per cent); and Growth (inflation +6 per cent).

Psigma, established in 2002, had £1.5 billion of client assets at the end of March this year.