CompaniesApr 10 2014

Defaqto predicts outsourcing to increase

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The number of advisers using discretionary management services will increase in the coming years in line with continued growth in general investment outsourcing, independent financial researcher Defaqto predicts.

In 2013 Defaqto found that 45 per cent of 452 advisers were outsourcing their investment propositions and of that figure, 51 per cent were doing so via discretionary management services.

The market response to the increased demand for outsourcing solutions has been the evolution of new product types and growth in the overall number of products available, Defaqto says.

Fraser Donaldson, Defaqto’s insight analyst for wealth management, flagged up that one of the biggest consequences of the Retail Distribution Review has been the number of advisers who have already, or are now looking to outsource their investment propositions.

He said: “Defaqto’s last survey on the subject indicated an increase in the proportion of advisers who are outsourcing their investment proposition. Activity we have witnessed leads us to believe that this figure continues to increase.

“Discretionary fund management is still relatively new to large segments of the adviser market. As demand and interest continue to increase, so the solutions available continue to evolve and innovate.

“The choices and options within the market are already very different to what they were just three or four years ago so it is important for advisers to keep abreast of how this market is developing.”