A significant number of advisers are now outsourcing investment management, with multi-asset funds and model portfolios built using external expertise now accounting for over 55% of assets, according to research in Aegon’s latest Adviser Attitudes Report.
The data revealed that the most popular form of outsourcing is use of multi-asset funds, favoured by 29% of those that outsource, while only 12% use external portfolios. However, despite this being a low figure in comparison, it has grown significantly in recent years. The use of single strategy funds is popular among 16% of advisers.
Model portfolio use, split between those advisers that outsource and those that utilise in-house expertise, accounts for 32% of all assets placed, falling from 36% in 2017 and 41% in 2016. In-house model portfolios have declined in popularity as a substantial number of advisers are opting to delegate asset allocation and fund selection to specialist investment managers.
Aegon investment director Nick Dixon said: “We’ve seen a clear increase in advisers’ use of outsourced investment management. This reduces adviser business risk and creates greater capacity for them to focus on client relationships and financial planning. Furthermore advisers’ increasing use of multi-asset funds and decreasing use of model portfolios reflects a trend towards simpler solutions for clients, with lower costs, aligned with the FCA’s increasing focus on value for money.”
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