Smart Beta  

Advisers lacking smart beta education


There has not been enough education about smart beta for UK advisers, according to Honor Solomon.

Speaking to FTAdviser, Ms Solomon, who is Legal & General Investment Management’s (LGIM) head of retail distribution, said it was an “area of focus” for the firm over the next few months as it prepared to launch smart beta products in the retail space.

“It’s funny, I’ve spent time on the road, and smart beta really seems like a new concept but actually it’s been around for years,” she said. 

She referred to statistics from Morningstar which showed there was $500bn (£382bn) globally invested in smart beta products.

She acknowledged: “I think the challenge has been, there’s not been enough education on it across the UK. 

“We’re actually one of the biggest managers of smart beta across Europe. So, our focus really has been on educating advisers across the UK over the last year in smart beta, or some call it factor based investment. 

“We’ve held what we call the spotlight events – 17 events across the UK, really just talking back to basics on what it means and what it can do for you and your clients.”

Ms Solomon joined LGIM from BlackRock in 2014 and was tasked with replicating the firm’s success in the institutional market in the retail space.

She explained: “What really attracted me to LGIM was the range of investment capabilities. I felt that actually the industry wasn’t aware of that range of particularly multi-asset capabilities and our active range as well.”

“We were outside of the top 20 [fund groups] three years ago in terms of net sales,” she revealed. “Now, three years later we’re number one, according to the Pridham Report, in terms of net sales.”

The head of distribution claimed the growth has come from “really listening” to clients and responding to them.

She suggested what UK advisers want from fund firms in terms of product range is transparency, value for money and then funds that respond to the latest regulation.

The fund LGIM has had the most success with is its L&G Multi-Index range, which surpassed £2bn this month and is run by Justin Onuekwusi.

“That range is risk targeted, transparent and good value for money. And our fund manager and our sales team have spent a lot of time on the road really explaining that, and that’s really resonated with our clients,” she said.

Watch the full interview with Honor Solomon at the top of the page.