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Evidence-Based, Diversified Investing for UK GIA, ISA & SIPP

Evidence-Based, Diversified Investing for UK GIA, ISA & SIPP

SCM Direct runs eight diversified, risk-adjusted ETF portfolios for UK Stocks & Shares ISA, SIPP, JISA and GIA accounts, designed from the outset for long-term investors who prefer an evidence-based, low-turnover approach.

Portfolios are constructed from approximately 20 physically replicating ETFs, each primarily listed on the London Stock Exchange, with some US and European exchanges — weighted to a defined risk profile, rebalanced periodically, and running at approximately 25% annual turnover. The all-in annual cost is 0.85%. The minimum is £10,000 for UK portfolios (£9,000 for the Junior ISA). SCM Direct is regulated by the Financial Conduct Authority (FRN 497525) and was founded in 2009 by Alan and Gina Miller, who co-invest their own and their family’s money in the portfolios on the same terms as clients.

If you are looking for a long-term home to build your future financial security and grow your wealth with an evidence-based, highly diversified, low-turnover, principled investment manager, this page explains what those words actually mean in retail UK investing and how SCM Direct’s approach is constructed around them.

What “evidence-based” means

In UK retail investing, “evidence-based” describes an approach that takes its design cues from peer-reviewed academic research and long-run empirical data rather than from market opinion or fund-manager intuition.

The core findings on which the approach rests are not controversial in academic finance:

  • Markets are mostly efficient most of the time. Active fund managers, as a group, do not reliably outperform their benchmarks after fees, especially over multi-decade horizons. The S&P SPIVA reports document this in granular detail every year.
  • Costs compound against you. A 1% difference in annual all-in cost can mean 22%+ less capital after 20 years on an otherwise identical portfolio.
  • Diversification works. Holding many uncorrelated assets reduces volatility without a proportionate reduction in expected return. Crucial when markets are volatile.
  • Time in the market beats timing the market. Long-run equity returns are concentrated in a small number of days; investors who miss those days because of attempted timing underperform.
  • Behaviour matters more than security selection. The largest source of underperformance for retail investors is buying high and selling low, not the specific funds they choose.

An evidence-based portfolio is built to protect the investor from the behaviours, volatility, and costs that the evidence says are most likely to erode returns.

What “low-turnover” means

Portfolio turnover is the rate at which the holdings/assets change. A 100% turnover portfolio replaces every position once a year; a 10% turnover portfolio replaces a tenth. Three reasons low turnover matters for long-term investors:

  1. Trading is not free. Every trade incurs dealing costs, market impact costs, and a bid-ask spread. Even with ETFs with tight spreads, these costs are real and accumulate. SCM Direct includes all these costs in its 0.85% all-in fee — but they exist on every portfolio at every firm, and they are larger when turnover is higher.
  2. Trading creates tax events outside ISA and SIPP wrappers. Inside an ISA or SIPP, capital gains tax does not apply. But the discipline of low-turnover investing also protects general investment accounts (GIAs), where every sale is potentially a taxable event.
  3. Trading is where active managers add — or destroy — value. The 2017 FCA Asset Management Market Study found “weak price competition” and persistent underperformance in actively managed UK retail funds. High turnover with poor judgment is the single most reliable destroyer of long-run return in retail portfolios.

An evidence-based portfolio with low turnover benefits from broad market exposure while keeping trading costs minimised.

Why does this matter specifically for an ISA or SIPP?

The Stocks & Shares ISA and Self-Invested Personal Pension are long-term wrappers by design:

  • An ISA can be held for life and passed in part to a spouse on death without losing the wrapper.
  • A SIPP is held until at least age 55 (rising to 57 in April 2028) and typically funds retirement income over a 20–30+ year horizon
  • A Junior ISA is locked until the child is 18 and often runs another 50+ years after that.

A 0.5% drag on an ISA portfolio for one year is barely visible. Over 30 years, it is the difference between £100,000 growing to £323,000 and to £375,000 (assuming a 5% annual return after fees). The wrapper is built for the long term; the strategy inside it should be too.

Two design principles follow:

  • The investment approach should be sustainable across decades, not topical. A theme-of-the-month, follow-the-crowd portfolio is the wrong content for a long-term wrapper.
  • The costs of running it should be low and predictable. Compound a fee schedule that varies year-to-year, and you compound uncertainty.
How is SCM Direct’s investment approach constructed?

SCM Direct’s eight portfolios are designed around four explicit choices:

  1. Build with physically-replicating ETFs from established providers, not synthetic structures, not actively managed funds, not single stocks. This keeps the underlying holdings transparent, liquid, and low-cost.
  2. Diversify broadly across asset classes, not just across equity sectors. Each portfolio holds a mix of global equity, bonds and (where appropriate) absolute-return strategies, weighted to the risk profile.
  3. Rebalance periodically, not opportunistically. When market movements push the actual allocation away from the target by a meaningful margin, the portfolio is rebalanced back to the target. The SCM team rebalances only when the evidence supports it, not in response to short-term headlines or by following the crowd.
  4. Charge a single all-in fee. 0.85% per year covers everything — management, custody, underlying ETF OCFs, trading and transaction costs. No initial charge, no exit penalty, no performance fee.

SCM Direct’s eight portfolios are designed around four explicit choices:

  1. Build with physically-replicating ETFs from established providers, not synthetic structures, not actively managed funds, not single stocks. This keeps the underlying holdings transparent, liquid, and low-cost.
  2. Diversify broadly across asset classes, not just across equity sectors. Each portfolio holds a mix of global equity, bonds and (where appropriate) absolute-return strategies, weighted to the risk profile.
  3. Rebalance periodically, not opportunistically. When market movements push the actual allocation away from the target by a meaningful margin, the portfolio is rebalanced back to the target. The SCM team rebalances only when the evidence supports it, not in response to short-term headlines or by following the crowd.
  4. Charge a single all-in fee. 0.85% per year covers everything — management, custody, underlying ETF OCFs, trading and transaction costs. No initial charge, no exit penalty, no performance fee.

The eight SCM Direct discretionary managed ETF portfolios span the full risk spectrum:

Portfolio Risk profile Typical use
Bond Reserve Cautious Capital preservation, near-retirement, charity reserves
50/50 Bond Reserve / Long-Term Return Cautious Defensive blend with some growth exposure
50/50 Bond Reserve / Absolute Return Cautious Defensive blend with absolute-return overlay
Absolute Return Balanced Aims for a positive return in all conditions
50/50 Absolute Return / Long-Term Return Balanced Mid-risk balanced blend
Long-Term Return Adventurous Active long-term, inflation-beating mandate
Equity Adventurous 100% equity, growth-oriented
Ethical (ESG) Adventurous ESG-screened, same fee as core portfolios
How does this differ from active management?

The dominant model in UK retail investment has been active management for decades — fund managers selecting individual securities and trading them to pursue outperformance. The empirical record of active management in mainstream asset classes is unambiguous: most funds underperform their benchmarks after fees, the few that outperform in one period rarely repeat that performance, and the costs of trying are substantial.

The SCM Direct approach does not bet against this evidence; it is built around it. The investment team’s role is portfolio construction, risk management, and rebalancing – not stock selection or market timing. The underlying ETFs track the market efficiently, and the SCM team uses them to build and maintain a portfolio that suits the client’s chosen risk profile.

This is closer to what David Swensen at Yale, Charles Ellis at Greenwich Associates, and Burton Malkiel at Princeton have argued for decades of work on institutional and individual investment policy. It is the lived-in version of “passive plus structure” rather than “passive plus nothing”.

How does SCM Direct compare with the alternatives for evidence-based UK investors?

The right answer depends on how much of the work you want to do yourself and how much value you place on a fixed all-in fee managed by experts with an evidence-based investment philosophy.

Approach Examples All-in cost (typical) Trade-offs
DIY single-index ETF Build your own with Vanguard / iShares ETFs on a platform 0.20%–0.50% Cheapest. You do all decisions, rebalancing and admin.
DIY multi-asset fund Vanguard LifeStrategy on a platform 0.30%–0.50% Cheap. One fund. You still do rebalancing across wrappers and risk-profile changes.
Discretionary robo-advisor Nutmeg/JPMorgan, Wealthify 0.55%–1.00% Discretionary, software-driven. Limited human investment team.
Discretionary ETF manager SCM Direct 0.85% all-in Discretionary, human-led, all-in pricing, founders co-invested.
Traditional discretionary Killik, Brewin (RBC), Rathbones 1.25%–2.00%+ Discretionary, often active stock selection, higher all-in cost.
Frequently asked questions
What is the minimum to invest with SCM Direct?

£10,000 for the Stocks & Shares ISA, SIPP and GIA. £9,000 for the Junior ISA.

0.85% per year. That figure covers SCM Direct’s annual management fee of 0.4%, custody, all underlying ETF Ongoing Charges Figures, trading and transaction costs. There is no initial charge, no exit penalty, no performance fee and no separately invoiced platform fee.

SCM Direct’s core portfolios run at approximately 25% annual turnover – meaningfully below the 60%+ typical of active retail UK funds. Rebalancing happens when allocations drift materially from target, not on a fixed calendar date.

The underlying building blocks are ETFs that track mainstream indices, so the implementation is passive. The portfolio construction and rebalancing decisions are discretionary. This means the SCM investment team weighs allocations across asset classes and risk profiles. This is sometimes called “evidence-based” rather than purely “passive”.

Yes. Provided you do not go over the annual wrapper – ISA, JISA, SIPP allowances.

Yes. SCM Junior ISA has a £9,000 minimum and a 0.85% all-in fee. The same eight portfolios are available.

SCM Direct can accept transfers from most UK SIPP and personal pension providers. There is no transfer-in fee. SCM handles the paperwork.

The SCM investment team, led by Alan Miller. Selection criteria are established ETF provider, physical replication, low Ongoing Charges Figure, sufficient liquidity, and alignment with the portfolio’s mandate.

Periodically. The frequency depends on market movements relative to target weightings – there is no fixed calendar rebalance and no opportunistic short-term trading.

Yes. Alan Miller is Chief Investment Officer and leads the investment process. Gina Miller is Co-Founder and runs all marketing, sales, PR, and communications for the firm. And co-invest in the same portfolios as clients.

Next step

  1. If you are looking for an evidence-based, diversified, low-turnover home for an ISA or SIPP, or general investment account – GIA- the most direct routes are:

To speak to someone before applying, call 020 7838 8650 or email enquiries@scmdirect.com.