Portfolio monitoring, attitude to risk questionnaires and fund selection are other key areas which significant proportions of advisers would not outsource, according to a survey conducted by FE Research.
Further, while a greater proportion of advisers stated they would outsource services, 40% of respondents stated they would offer the full range of services in-house. The results differ slightly from those of an Investec survey conducted earlier in the year which found that half of IFAs were considering, or were already, outsourcing some client services as a result of RDR.
Of those services that IFAs would outsource, asset allocation was the most commonly chosen, with just over a third, 36%, stating this to be the case. Reasons cited are shown in the graph below.
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Outsourcing to a DFM could prove to be a profitable decision for the IFA’s client; figures released last week showed that 50% of DFMs would cease investment with a fund manager that failed to perform within the first six months.
Rob Gleeson, Head of Research at FE, commented: “This survey demonstrates that the relationship between advisers and their clients remains paramount. Providers of outsourced solutions, such as model portfolios, need to acknowledge that IFAs want to remain in the driving seat and to maintain direct contact with their clients. This is as it should be, as IFAs know their clients far better than third-party fund managers, and have a deeper understanding of their financial goals and capacity for risk.
