The popularity of multi-asset funds has doubled in the last year, as adviser seek to outsource fund selection and asset allocation, which can be complex and costly to maintain.
Model portfolios, however, remain most popular with advisers, as they facilitate bespoke investment propositions that clients can’t find anywhere else.
This is despite 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.
As a result, just over a third (36%) of advisers mainly use model portfolios with clients in 2017, down from 41% last year.
Other options
Multi-asset and model portfolio were the most popular investment strategies with 72% of advisers responding to the Aegon survey.
The remaining 28% predominately use:
- Single-strategy funds (12%)
- Stock picking (9%)
- Discretionary Fund Managers (8%)
Addressing mainstream needs
Nick Dixon, investment director at Aegon, said: “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.”
