The group surveyed 205 advisers and found 57 per cent claimed it was a lack of knowledge which discouraged them from using investment trusts. A total of 36 per cent of advisers said they viewed trusts as complex.
Trusts are different to open-ended funds in that they are listed on stockmarkets. This means their share prices can move differently to the value of the underlying assets.
They can also use a form of borrowing, known as gearing, which can amplify both positive and negative returns.
The survey also showed 55 per cent of advisers cited a lack of availability on platforms as a major impediment to using them in client portfolios.
The three major fund supermarkets – Cofunds, Skandia and Fidelity FundsNetwork – are yet to make investment trusts available in spite of them all claiming such a move is in their pipeline of projects.
Advisers also highlighted “functional issues” in terms of using investment trusts within centralised investment propositions.
However, advisers who were surveyed that did use trusts cited “enhanced shareholder returns through gearing”, the ability to “provide a stable income” and “robust shareholder protection” as among the reasons they liked trusts.
Simon Crinage, head of investment trusts at JPMAM, said: “I think it’s safe to say that while investment trusts are no longer one of the City’s best-kept secrets, popular myths and misunderstandings still overshadow these vehicles.
“The RDR has definitely helped to encourage a more level playing field, given the UK advisory community’s long-standing affair with open-ended funds, but perception hurdles inevitably take time to overcome.”