Multi-asset and multi-manager funds are a staple of most advisers’ investment arsenal. Motivations to use and their role within client portfolios differs, but one of the most common things we hear from advisers is that they are being used as a one-stop solution for smaller portfolios.
82% of advisers would usually reserve a multi-asset/multi-manager fund approach to clients with investable assets of below £100,000. A lot of these advisers may well be segmenting clients by portfolio within their centralised investment propositions, and will look to recommend clients above this threshold into either their own in-house portfolios or choose to go down the outsourced route with a DFM.
A smaller portion of advisers sees the use of multi-asset funds as appropriate to all clients, providing them with a suitable risk-targeted investment solution. Only the more complex client cases will go down the model portfolio route. Advisers who place more emphasis on financial planning and less on investment management harbour this sentiment.
Gone are the days where recommending a fund-of-funds solution with an OCF of 2% is commonplace amongst financial advisers. Many cheaper fund ranges are some of the most popular, largely owing to the use of index tracker funds and ETFs. Firms such as Vanguard, LGIM and BlackRock are frequently mentioned by advisers. In a more cost-conscious world, given adequate performance, many find it hard to turn their noses up at an appropriate client solution carrying charges of 0.2%.
Our final report of 2018, Multi-Asset and Multi-Manager, will be published next week. To find out about this report or how Platforum research can help out your firm in 2019, then contact Jean-Luc de Jonge for details.