The gap between advisers who prefer model portfolio over multi-asset strategies is closing.
Based off fieldwork undertaken in March 2017, comprising interviews with hundreds of IFAs through Aegon’s UK Adviser Panel, the pensions and insurance provider discovered that the number of advisers primarily using multi-asset products was around 36%.
That’s double the figure found by a Platforum survey in 2016.
Using the figures from the same Platforum survey, researchers at Aegon UK also detected a dip in the number of IFAs using model portfolios as their go-to type of investment vehicle, from 41% in 2016 to 36% this year.
Aegon investment director Nick Dixon explained that the rise of the multi-asset fund is a result of more intense cost and regulatory pressures and a way to simplify administration 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,” he said.
But “model portfolios aren’t going anywhere anytime soon,” he added.
Both multi-asset funds and model portfolios topped other methods of investing, like DFMs, single-strategy funds and stock picking, each of which were used predominantly by only a small handful of advisers – 8%, 12% and 9%, respectively.
“Model portfolios remain the dominant way of building investment strategies, and we expect this to continue for some time to come,” said Dixon.
“Advisers are, and will continue to, find appetite amongst clients for their uniquely tailored portfolios.”
