Multi-asset funds double in popularity with advisers

by | Jul 25, 2017

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Brown Shipley

A new survey suggests that advisers favour multi-asset funds in a bid to simplify fund administration.

Aegon UK said that the popularity of multi-asset funds has doubled in the last year, as advisers seek to outsource fund selection and asset allocation responsibilities.

The research from Aegon revealed that 36% of advisers said they predominantly use multi-asset funds with clients in 2017, up from 18% in 2016. What’s more, that the popularity of model portfolios dipped from 41% to 36% suggesting more advisers are outsourcing investment administration and governance.

However, model portfolios remain popular with advisers, as they facilitate bespoke investment propositions that clients can’t find anywhere else. But, said Aegon, there are signs that the governance responsibilities, cost of investment research, plus the administration involved in gaining client consent for any changes, is driving some advisers toward the multi-asset route.

Investment Director at Aegon Nick Dixon explained: “We’ve seen a rise in the popularity of multi-asset funds, as advisers face up to greater cost and regulatory pressures, and look to simplify investment administration processes. While some who have large numbers of high-value clients are looking to gain discretionary fund manager permissions, others see multi-asset funds as a cost-effective way of addressing mainstream investment needs.

“However, model portfolios remain the dominant way of building investment strategies, and we expect this to continue for some time to come. This is partly why we have invested so heavily in the online model portfolio functionality used by advisers on our Aegon Retirement Choices platform. Model portfolios aren’t going anywhere soon. Advisers are, and will continue to, find appetite amongst clients for their uniquely tailored portfolios.”

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