The UK sales manager for EEA Fund Management said that in “countless” meetings with IFAs, wealth and discretionary managers across the UK, it is clear that the industry is still “going through change and evolution as a result of the RDR”.
He said: “Our meetings revealed a common theme. One consequence of RDR has been the greater use of centralised research functions, investment panels and model portfolios, as firms seek to standardise their systems, processes and solutions.
“Over the course of hundreds of meetings, advisers and wealth managers have been sharing concerns about the effect of this on investment propositions.”
The effect, he said, was that the same fund names seemed to crop up in “supposedly bespoke solutions” offered by “prestigious” names in the industry.
As assets are outsourced into these few funds, Mr Katsis said senior advisers were worried the assets in these funds would swell “exponentially as clients’ investments are placed in them out of procedural necessity”.
Mr Katsis added: “Although senior people in advice firms are alert to these dangers, RDR has placed greater emphasis on the need for advisers to demonstrate added value to fee-paying clients.”
He said that if wealth management firms who manage an adviser’s clients’ assets are not giving them enough true choice and diversification, it would not benefit the end client.
Adviser view
Jeffrey Lewis, director of Edinburgh-based Robson Macintosh, said: “Many retail investment funds are getting very large, and advisers need a viable alternative. This is why IFAs have been going down the multi-manager route, getting this for a lot less money.
“Properly risk-rated portfolios, run in a multi-asset, multi-manager way, from three or four discretionary fund managers, may be the way to go for clients. They will get the diversification of managers and underlying funds.”
