May 22 2013

deVere bemoans the lack of diversity in clients’ old portfolios

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BySimoney Girard

The head of sales for Allianz Global Investors said there was a clear advice gap in the post-retail distribution review environment and this, coupled with an increased focus on risk and outcome, meant the burden on advisers to construct, manage and monitor individual client portfolios was increasingly hard.

Speaking a year after the launch of AllianzGI’s RiskMaster funds, which are diversified portfolios with monthly asset allocation adjustment, Mr Smith said advisers needed a clear investment solution for clients with “clear risk parameters and the potential for real returns to meet their long-term needs”.

He added: “Controlled risk is the way to encourage investors back into the market which, as we know, is more important than ever when interest rates remain low and with high levels of government debt, we are likely to experience future surprises in inflation.”

His comments came as international wealth manager the deVere Group revealed that only a few new clients this year had any “truly beneficial diversification” in their old investment portfolios.

Nigel Green, chief executive of the group, said: “It’s extremely worrying that our advisers have reported so few investors when they first came to us had a well-diversified portfolio.

“Some 68 per cent of all new clients who have sought advice from us in the first four months of this year lacked any truly beneficial diversification in their portfolios which, of course, potentially put their hard-earned life-savings at greater risk in these times of ongoing volatility.”

He added that “the most worrying feature” of new clients’ portfolios was their overexposure to bank deposits, especially given the lessons of the credit crisis and recent events in Cyprus.