Advisers cited a ‘lack of bandwidth’ required to deal with the growing complexities involved in delivering this service alongside their other responsibilities as the cause of this difficulty.
Due diligence demands were a key reason why in-house management services will be harder to provide according to 82% of respondents, while 63% said a lack of a dedicated in-house research team was an issue, too much administration was blamed by 55%, and insufficient qualifications and regulatory permission was pinpointed by 44%.
Important criteria for advisers when choosing which discretionary investment manager to work with included the quality of service and transparency of charges, cited by 82% of respondents. These were closely followed by the investment performance and costs, both at 79%, and security of assets at 78%.
Investec quizzed 107 UK intermediaries during December 2015 and January 2016 in compiling the research.
“Advisers have multiple calls on their time and most realise that it will become increasingly difficult to cover all the traditional bases satisfactorily and have any chance of successfully growing their business,” said Mark Stevens, head of intermediary services.
“Advisers are now facing the twin challenges of volatile markets and ongoing compliance and regulatory demands,” Stevens continued. “Conditions will, if anything, become increasingly tougher and more advisers who have yet to outsource key services such as investment management are likely to do so.”
