Advisers' multi-asset fund use surges

Advisers' multi-asset fund use surges

The proportion of advisers favouring multi-asset funds has doubled over the past year amid a waning of interest in model portfolios, a study has found.

The percentage of intermediaries who predominately use multi-asset funds for client monies has risen from 18 to 36 per cent, according to research from Aegon. Model portfolio use has fallen by five percentage points as a result.

The report was released yesterday (July 25) as an update on a March 2016 survey by the Platforum. The Platforum surveyed more than 250 advisers while Aegon canvassed more than 100.

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The figures mean the proportion of advisers favouring multi-asset funds is now equal to the number who give priority to model portfolios. The remaining 28 per cent of advisers were said to prefer single-strategy funds (12 per cent), stockpicking (nine per cent) and discretionary fund managers (eight per cent.)

Aegon’s investment director Nick Dixon said the costs and administration responsibilities tied to model portfolios may be pushing intermediaries to seek simpler processes.  

“While some who have large numbers of high-value clients are looking to gain discretionary fund manager permissions, others see multi-asset funds as a cost-effective way of addressing mainstream investment needs."

But he added: "Model portfolios remain the dominant way of building investment strategies, and we expect this to continue for some time to come."