The Scottish Widows Platform is now live for valuations in Dynamic Planner, the UK’s leading risk based financial planning system.

This new integration with the Scottish Widows Platform enables Dynamic Planner users to onboard and value new clients and existing clients in preparation for their client review or cashflow planning, and benefit from the new integration to seamlessly pull in the data at a time they want.

The integration will run alongside the existing Advance by Embark integration while Scottish Widows completes its migration of Advance clients to the Scottish Widows Platform, later this year.

Financial planning firms can now use Scottish Widows’ technology, powered by FNZ, and backed by Lloyds Banking Group, to access over a hundred fund managers, thousands of mutual funds, UK listed equities and Exchange Traded Assets within Dynamic Planner’s one system.

Chris Jones, Proposition Director at Dynamic Planner said: “The Scottish Widows Platform is now live for valuations in Dynamic Planner, and financial planners can begin to onboard and value clients ahead of Advance by Embark Platform closing. For a limited period of time, both integrations can be used. This is yet another example of our commitment to ensuring our users can support their clients throughout and deliver increasing value more efficiently.”

Ross Easton, Head of Platform Propositions at Embark Group said: “We’re pleased to have seamlessly integrated Dynamic Planner with the Scottish Widows Platform. This delivers against our aim to be the most connected platform in the market, Scottish Widows Platform now has bulk valuation coverage with the significant majority of UK CRMs.”

This latest integration is the continuation of Dynamic Planner’s commitment to solving industry wide inefficiencies, a strategy at the heart of the firm’s vision.

Not a Dynamic Planner user? Schedule a free no-obligation demo with a business consultant and experience the full functionality of Dynamic Planner.

Dynamic Planner’s Investment Committee (IC) met on Monday 24 July with the main task of reviewing the inputs and outcomes from the optimisation process for setting the 2023/24 strategic benchmark asset allocations.

The IC discussed the anticipation of a ‘return to normal’ for financial markets as yield curves should normalize to an upward slope given higher inflation expectations. The US Federal Reserve’s next rate move and its ‘higher for longer’ policy mantra are predicated on high and sticky inflation.

Inflation may have fallen from its peak, but not enough for the Fed to officially pause rate hikes, given its official 2% inflation target. It is unlikely to pivot and cut rates meaningfully within the next two years. However, whilst unstated, a significant slowdown in economic activity or renewed regional banking problems would also get the Fed to take action. On the subject of US banks, the crisis has ebbed since March, but the dangers haven’t gone away.

The dual prospects of slowing global economic and negative earnings growth for the coming quarters raises the risk of ‘intermittent’ rather than ‘deep’ recession. Rising interest rates, unrelenting fiscal deficits and high government debt, reversing QE holdings and high levels of market leverage, due to LDI strategies however, increases the risk of currency and bond market volatility.

Conversely, China, the world’s second-largest economy, officially slipped into deflation for the first time in two years as consumer prices fell 0.3 per cent. Prices had already flatlined for much of 2023, bucking the global inflationary cycle. The property market debt overhang also continues to cast an ongoing shadow over any resurgent growth hopes in China.

UK gilt yields have spiked again in response to unexpectedly strong inflation and labour market numbers. The persistent underlying strength of core inflation suggests the UK is fundamentally diverging from Europe and the US. The recent interest rate rises have had a negligible impact on demand or the housing market (so far), but the economy is teetering on recession whilst unemployment remains lower than expected at this stage of the economic cycle and strong wage inflation (and industrial action) persists. Market expectations are for interest rates to be ‘higher for longer’ in the UK than elsewhere.

The IC approved the Capital Market Assumptions for Q3 2023 which signalled significantly large increases for fixed income volatility (around 10 bps), relative to previous quarters.

Expected returns for fixed income were increased given the recent rise in bond yields. There were also increases for equity return expectations (but to a lesser extent), with the exception of the UK, where they have been lowered.

Read full, Q3 2023 analysis from the Dynamic Planner Investment Committee.

Dynamic Planner, the UK’s leading risk based financial planning system, has again expanded its universe of risk profiled funds to include PortfolioMetrix’s three Core funds.

New to Dynamic Planner, PortfolioMetrix is a discretionary investment manager which helps independent financial advisers to deliver expected outcomes for their clients. PortfolioMetrix builds portfolios that ‘fly in formation’, this is achieved via consistent risk spacing and risk separation. The portfolios provide a coherent toolset for advisers, leading to suitable outcomes for investors as well as efficiency gains for the advice business.

The three PortfolioMetrix funds now risk profiled on Dynamic Planner are:

Yasmina Siadatan, Chief Revenue Officer at Dynamic Planner said: “We welcome PortfolioMetrix to the expanding Dynamic Planner ecosystem of leading financial advice and wealth organisations, who now sit alongside our 160 expert managers in the universe of over 1700 risk profiled funds. We look forward to helping them match people to suitable solutions through our multi award winning financial planning technology over the months and years to come.”

Ben Peele, PortfolioMetrix managing director, said: “We know advisers don’t like being tied to one provider so, while we have our own risk profiling tool, we also appreciate different firms will have different preferences and may have long established relationships with third-party software providers.

“We’re delighted to partner with Dynamic Planner and to have them risk profile our three Core funds.”

This latest integration is the continuation of Dynamic Planner’s commitment to solving industry wide inefficiencies, a strategy at the heart of the firm’s vision.

By Casterbridge Wealth

Investing is often made to appear more complicated than it needs to be, and sometimes conventional wisdom isn’t really wisdom at all.

Nothing proves this more than the damage wrought by bonds during 2022. The so-called ‘risk-free’ asset proved anything but, and bond market falls in the region of 30% would have made for some difficult conversations with unsuspecting investors who thought their bond allocation gave them some protection.

The battering bond markets took last year is a great example of ‘group think’ within investing – where warning signs are ignored and it feels safer to travel with the herd. Unfortunately though, when it comes to Managed Portfolio Service (MPS) offerings, independent thinking is not part of the proposition. Instead, most choose to ‘play it safe’ and hug their benchmarks.

That’s all well and good if you believe in safety in numbers. But advisers may want to ask whether MPS portfolios are being managed to a benchmark for the sake of the client, or the sake of the provider. Because the simple truth is that clients don’t care about the benchmark; they just don’t like losing money.

We recognise the feeling, which is why one of the defining principles at Casterbridge is that we manage client money as if it were our own. In fact, when you don’t believe in benchmarks determining your asset allocation, it gives you the freedom to play to your strengths and act on your own insights.

So, when in 2021 central banks and the big investment banks were describing post-pandemic inflation as merely ‘transitory’, we were more sceptical. Our research, our experience of managing investment portfolios across numerous market cycles, and our belief in challenging conventional thinking told us that pent-up consumer demand and broken supply chains would lead to surging – and far stickier – inflation. Being benchmark-agnostic meant we could act on this view.

We therefore changed our portfolios to a maximum underweight in bonds, while holding shorter duration bonds capable of proving more resilient in a rising rate environment. As a result of this inflation hedging and bond underweight, the Hardy MPS range outperformed most of its peers by between 5% and 8% over 2022, meaning those advisers who recommend our Hardy range could have much more positive conversations with their clients.

Our agnostic approach also applies to choosing between active and passive investments for our portfolios. We don’t believe in restricting our investment universe, and think passive funds should be used as a building block of active asset allocation, not as the driver. We doubt that passive investments have the capability to outperform in the current environment, so we apply a blended approach that stays conscious of costs, while still giving portfolios the potential to outperform based on value judgements.

We’re always ready to share our thoughts on portfolio positioning or the future direction of markets. So, to have a frank and fearless discussion with us, get in touch on 0800 644 4848.

For more information about the Hardy Managed Portfolios, visit

By Damien Lardoux, Head of Impact Investing, EQ Investors

The level of market volatility seen in 2022 can be disorienting for even the most experienced investors. In challenging markets such as these, we can use valuations to gauge the attractiveness of the stock market over the next few years.

With a current valuation multiple of 15.5x their expected profits in the coming 12 months (forward PE ratio 1), global equities experienced a significant derating in 2022. Valuations were as high as 25x in 2020 and 2021, reaching levels not seen since the late 1990s. At the current multiple, we are below the 10-year average and broadly in line with the 20-year average, so these are reasonable entry points for medium- to long-term investors.

In the short-term though, uncertainty is high whilst the future path for inflation and interest rates remains unclear. If US inflation2 decreases to 3% or below by the end of 2023 (as is currently expected by the market), it is very likely that interest rates will come down and valuation multiples expand.

However, if inflation proves to be more stubborn than expected and plateaus at 5% for example, central banks could maintain their hawkish stance for longer and put further downward pressure on valuation multiples in the short term. In our opinion, inflation will remain the key driving factor of market sentiment and valuations in 2023.

As company valuations decreased in 2022 with bigger falls experienced by smaller size companies, we have seen several mergers and acquisitions announced by larger, more established companies looking to grow. In the last two months of the year, we saw several bids for fast-growing companies that offer innovative and greatly sought-after sustainable products and services.

The following three examples highlight, in our opinion, just how attractive current valuations are for the sustainable themes in which we invest.


Fast growing companies in this sector saw significant profit-taking in 2022 after a strong period of outperformance during the pandemic. Abiomed, is an innovative and profitable US company which has developed Impella, the world’s smallest heart pump. By November 2022, Abiomed’s year-to-date share price change was down circa -30%. Johnson & Johnson, the world’s largest healthcare company, saw this as an opportunity and made a $17 billion bid to purchase the heart pump manufacturer, representing a 48% premium to where shares were trading.

Sustainable foods

Denmark’s Novozymes is the largest discoverer, manufacturer, and marketer of industrial enzymes in the world. Its enzymes have a vast array of applications, spanning food, agriculture, and healthcare. In December, Novozymes announced a merger with Chr. Hansen, another Danish company, which supplies bacterial cultures and enzymes across the food sector. The deal will likely lead to Novozymes solidifying its position as a leader in sustainable food production at a time when supply chain weakness and resource security is at the fore. Novozymes has proposed paying a 49% premium to Chr. Hansen’s market value, which before the announcement was down -14% in the year-to-date.


Berkshire Hathaway’s legendary founder, Warren Buffet, is well known for his disciplined investment approach and his caution vis-à-vis technology stocks. In November, Berkshire Hathaway announced a $4.1 billion investment into Taiwan Semiconductor Manufacturing Company, the world’s largest manufacturer of semiconductors. Whilst Warren Buffet hasn’t commented publicly on the deal, the company trades on a cheap valuation – shares were down -36% in the year-to-date. It is a leader in its field and has solid fundamentals – all of these are likely to have attracted Buffett as an investor.


With an expected economic slowdown and recession ahead, we believe that large corporates and investors will be bringing back their attention to companies that can achieve strong and sustainable earnings growth.

In our view, a lot of these opportunities can be found within the healthcare, sustainable food and technology industries, and the recent drops in valuations make those even more attractive, particularly for medium to long-term investors. We firmly believe that the EQ Portfolios are well positioned to benefit.

[1]  Price divided by 12-month forward consensus expected operating earnings per share, Source MSCI, Index: MSCI AC World Index, December-2022
[2] US Consumer Price Index

By Jim Henning,
Head of Sustainable Investment

When it comes to doing our washing, we all know it’s important to read the clothing labels to avoid any unfortunate mishaps (as well as trying to reduce the water consumption and temperature levels). Similarly, when it comes to sustainable investing, the risk of ‘greenwashing’ has been a persistent issue.

The ever-widening range of sustainable investment objectives, definitions and related solutions has led to misunderstandings, confusion and sometimes claims are being made that simply wouldn’t stand up to scrutiny. This can lead to the unintended consequences of eroding trust in the financial services industry and lowering levels of capital flows into sustainable enterprises than would have otherwise been the case.

Global regulatory bodies have been busy trying to fix this problem by defining what exactly a sustainable investment means, thereby bringing more clarity, standardisation and raising standards. Greater transparency is vitally important but is an incredibly complex and technical task and remains very much work-in-progress.

It’s also interesting to note that the EU, US and UK regulators have chosen three definition categories, but predictably each have important differences in approach. Based on the recent FCA consultation paper ‘CP22/20 Sustainability Disclosure Requirements (SDR) and Investment Labels’, the UK proposals look more aligned to the US than the EU scheme. In the latter case the EU’s SFDR was intended to be a disclosure regime only, while the FCA’s proposals introduce a labelling regime with three sustainable categories and new consumer‑facing summary disclosures.

Sustainability Disclosure Requirements – Proposed fund labels

*At least 70% of a ‘sustainable focus’ product’s assets must meet a credible standard of environmental and / or social sustainability, or align with a specified environmental and / or social sustainability theme. These products will typically be highly active and selective.

**These products will typically be highly selective, emphasising investment in assets that offer solutions to environmental or social problems and that align with a clearly specified theory of positive change.

Importantly, the new labels will also apply to discretionary managed portfolio services (MPS). For an MPS to qualify to use one of these labels, 90% of the total value of the underlying products in which it invests must meet the qualifying criteria for the same label. The DFM provider must then make the disclosures for each of the underlying products available to retail investors.

Choosing the right name for a product has always been important and often the subject of much internal debate within marketing departments. As it’s likely the first thing a retail investor is made aware of, the FCA intends to prohibit the use of sustainability related terms in either product names or marketing material for those products that do not qualify for a sustainable label. Examples of these terms would include ‘ESG’, ‘climate’, ‘impact’, ‘sustainable’ or ‘responsible’.

Following the consultation period, the final rules are due to be published by end of June 2023 and new labelling, naming and marketing restrictions will follow on 12 months later. The disclosure proposals in CP22/20 are far-reaching, covering all regulated funds to varying degrees, not just the labelled ones. They will require much more granular transparency and ongoing disclosures particularly surrounding investment objectives and policy, alongside progress reporting against published KPI’s.

There is no doubt that qualifying for a sustainable label will be a high bar to meet for many asset managers. In fact, based on the FCA’s own initial estimates, of those products that currently have sustainability-related terms in their names and marketing, two-thirds could decide to remove them accordingly.

Based on the 139 risk profiled multi-asset solutions currently in Dynamic Planner that have such terms in their names, it is interesting to see the differences across both funds and MPS’s. ‘Sustainable’ is by far the most favoured naming option across both wrapper types, but there is notably a greater proportion of more specialist ‘Impact’ and ‘Ethical’ offerings in the MPS space. For ethical screened funds, I suspect many are likely to elect one of the new labels, as sustainability has always been an important underpin to their philosophy and the preference of their traditional dark green investor base.

Over coming months, we can expect a raft of objective and fund name changes in light of the proposed regulations. At Dynamic Planner, we will ensure that relevant and objective sustainability research is available in the system, covering both products adopting the new labels and those which don’t. In the latter category, many will continue to actively apply ESG screens in their stock selection process and engage with investee companies (and also more widely across the asset management firm) from a fiduciary risk management perspective.

Thereby, users will be fully equipped to connect the recommended solutions to both risk and sustainability preferences via our Client Profiling process and meet the forthcoming Consumer Duty requirements.

Not a Dynamic Planner user? Schedule a free no-obligation demo with a business consultant and experience the full functionality of Dynamic Planner.

Dynamic Planner’s Investment Committee (IC) met on 20 October, focusing on the unprecedented shockwaves suffered by UK assets and currency following the September mini-budget and in particular their impact on the lower risk benchmarks.

In expectation of a return to some form of fiscal normality in the UK, the IC considered the wider global perspective. As central banks play catch-up to quench ingrained inflationary pressures, less globally co-ordinated policy responses appear likely, which could further increase bouts of currency and economic volatility, suggesting that asset allocation decisions on country and currency still matter.

The IC discussed the importance of maintaining bond holdings in the lower risk benchmarks and other options, including the wide range of differing bond maturities modelled within Dynamic Planner.

This comprehensive range of asset classes can be used to assess the risk implications if tactical tilting of portfolios from the long-term benchmark allocations is being considered, given current volatile market conditions.

Read the Investment Committee’s full update.

Following the rapid economic bounce back from Covid lockdowns, the Investment Committee [IC] had become increasingly concerned about the impact of rising inflation expectations, taking hold at a time when the level of economic and geo-political uncertainty remains elevated.

This environment presents many challenges when constructing risk-adjusted asset allocation benchmarks, particularly given the sensitivity of bonds to rising interest rates and their heightened correlation to equities.

You can read more about Dynamic Planner’s Investment Committee meeting in July, when the annual asset allocation review was conducted.

As part of this process, there was lengthy and detailed discussion around the implications for each of the benchmarks, in the event of an inflation shock and resultant elevated episodes of market volatility.

The strategic changes, which will be live in Dynamic Planner from Friday 7 October 2022, expressed the following themes:

A reminder: on Thursday 20 October 2022, Dynamic Planner’s Chief Investment Strategist, Abhi Chatterjee will present an update on the performance of the asset allocation benchmarks and the wider market outlook. Register for the quarterly webinar.

By Chris Jones, first published in April 2021

If you lived and worked on an isolated island community, and you were able to source everything you needed from your fellow islanders, retirement would be a relatively simple thing to plan.

You would earn a wage or make a profit doing your thing. You would not only spend your income on your fellow islanders’ goods and services, but you could also invest whatever you had left over in their businesses. When you retired, your share of the profits in those business would be directly correlated to the cost of the goods and services, and everyone is happy.

You could, of course, lend money to these businesses instead but there would be no certainty that the fixed capital repayment or interest would be correlated to the cost of goods in the future. This inflation risk is why asset-backed and equity in particular are so good for retirement planning. We may not have felt it recently, but inflation does creep up on you over time.

In either case there are other risks: the business might go bust, the owner may not honour the agreement and so forth. These are things that apply to both the loan and the equity.

I am imagining my theoretical example set in the 18th or 19th century: a blacksmith, baker, farmer, publican, tailor, doctor etc. Since then, advancements in transportation, industrialisation, and communications have led to globalisation which brings improvements and challenges to this premise.

Reducing risk through diversification

Over the last generation, people have been able to invest in Mitsubishi, Nestle, Total, Tesco, BP, Diageo, M&S, GSK etc. Clearly being able to do this reduces risk through diversification and a fair and efficient market. It does introduce additional market and currency risks, but nonetheless people can easily invest in the companies that supply them and this is sensible and encouraging. I understand that the reason funds tend to show top 10 holdings is mainly because investors feel reassured by this.

If globalisation impinges on our remote island scenario, had you invested in your local small business supplier, would it have been acquired and integrated into a global company, or would it have just gone? Whilst investing in equities for long term future retirement needs is compelling, the question of which share is important.

At Dynamic Planner when we use phrases like U.K. Large Cap Equity or Short-term Bonds it has a very specific meaning. For these examples, it is the MSCI UK Equity Large Cap Total Return Index and ICE BofA 1-5 Year Sterling Corporate Index. Individual funds or stocks and shares vary from that both in performance and in risk characteristics, as we can all easily observe. We of course calculate and measure this variance and use it when we risk profile funds at a holdings level.

Expected real returns

Whilst indices are great for consistency of term and qualitative analysis, their components are very fluid and they are totally ex-post (or after the event) in nature. When a share grows, it enters or forms a larger part of that index; that doesn’t mean that it will stay there or remain at that proportion of the index.

Our service provides ex-ante, expected real returns; volatility, correlations and covariances as well as a Monte-Carlo stochastic forecaster. What we cannot do is tell you what stock will make up an index in 30 years’ time. If we could, I would be living on my own private island right now. When you think about asset manager charges, caps and their value, it’s worth reflecting on how difficult yet worthwhile it is for them to try to do this on your behalf.

Whose labour, goods and services will be needed when you retire?

The companies that make up local indices and the countries that represent a global index change quite dramatically. At the end of the 19th century commodities and the UK were dominant.

By 1967 the largest companies in the US were GM, Exon, Ford, GE, Mobil, Chrysler, US Steel and Texaco -almost all car related. At the same time, the UK was busy devaluing its currency and voting not to allow women into the London Stock Exchange. Back then half of UK shares were directly owned by individuals, so in many ways the market was closer to my imagined island scenario than the globalised fund-led market of the 21st century.

Change in relative stock market size from 1899 to 2021.

Things change. Would anybody like to be living off Kodak, Blockbuster or even Tie Rack shares today?

Whilst the basic principle of exchanging your labour for capital whilst you work, and then exchanging your stored capital for labour when you can’t, has been consistent and remains valid today, when it comes to choosing where to store your capital the fundamental question remains: whose labour, goods and services will be needed when you retire?

There has been a lot written about ESG and sustainability. Everyone has an opinion and many people have suddenly become experts. I am certainly not an expert and I won’t add my opinions to the pile.

It does, however, appear sensible to invest in companies that will still be around in the future, and it might be that use of the word ‘sustainability’ is all you need to prompt you to consider ESG information and your client’s preferences. A psychometric sustainability questionnaire and objective MSCI ESG data is available in our system.

Not yet a Dynamic Planner user? Schedule a free no-obligation demo with a business consultant and experience the full functionality of Dynamic Planner.

By Cantab Asset Management

The last decade has seen significant asset price appreciation, accommodated by expansionary monetary policy. Alongside this, periods of uncertainty have led to spikes in volatility. Whilst recent levels of Quantitative Easing are unprecedented in historical terms, volatility and market corrections are not. This note considers the relationship between active management and market volatility in the context of achieving strong long-term performance. The main takeaways from the following analysis are:


The VIX index is used by investors as a measure of implied volatility in financial markets. It is based on S&P500 option prices and is commonly referred to as the “Fear Index”. Between 2018 and 2021, the VIX has breached level 20, which is considered to be ‘high’, on four occasions, as illustrated below.

Each of the four highlighted periods captures a date range in which the index level moved from low-to-high-to-low and is used as a proxy for short-term market volatility. Performance during these periods is illustrated below, alongside commonly-used risk metrics for three actively managed funds and their respective passive alternatives.


These findings may or may not be representative of the entire active universe of funds; to test them is beyond the scope of this analysis. What is clear however, is that within the universe of actively managed funds, there are options that provide significant outperformance on a risk–adjusted basis during periods of heightened volatility. It is our role as advisors to identify and monitor these.

When applying the same analysis to the actively managed Cantab multi-asset portfolio, not only did the portfolio outperform its passive equivalent over the full period but also achieved relatively similar volatility and max drawdown metrics overall. The analysis also found that after a material peak-to-trough movement, the actively managed Cantab portfolio recovered considerably faster to previous highs when compared to the passive equivalent.

The results from the analysis not only highlight the importance of taking a long-term view, but also demonstrate that there are two sides to volatility: downside and upside. Volatility is usually calculated using variance or standard deviation, by summing the square of the deviation of returns from the mean return and dividing by the number of observations in the data set. By definition, upside and downside deviations are treated equally. Whilst higher volatility implies higher risk, due to less predictability of asset pricing, investors are typically in favour of upside volatility in practice. By pursuing a passive strategy, investors avoid the downside risk of underperforming a benchmark index; unfortunately, they also miss out on the upside potential of outperformance.

Periods of short-term volatility have been common throughout history and will continue to be common in the future. However, during such periods, investors tend to focus on the negative side of volatility rather than directing their focus to the bright side of volatility that is offered by good active management.


Risk warnings:
This content has been prepared based on our understanding of current UK law and HM Revenue and Customs practice, both of which may be the subject of change in the future. The opinions expressed herein are those of Cantab Asset Management Ltd and should not be construed as investment advice. Cantab Asset Management Ltd is authorised and regulated by the Financial Conduct Authority. As with all equity-based and bond-based investments, the value and the income therefrom can fall as well as rise and you may not get back all the money that you invested. The value of overseas securities will be influenced by the exchange rate used to convert these to sterling. Investments in stocks and shares should therefore be viewed as a medium to long-term investment. Past performance is not a guide to the future. It is important to note that in selecting ESG investments, a screening out process has taken place which eliminates many investments potentially providing good financial returns. By reducing the universe of possible investments, the investment performance of ESG portfolios might be less than that potentially produced by selecting from the larger unscreened universe.