f and c taps into advisers multi manager weakness

F&C’s retail business saw net inflows during the third quarter, despite the group reporting outflows, due to a focus on targeting IFAs with multi-manager products it said today.

f and c taps into advisers multi manager weakness


In the three months to 30 September retail inflows, which are determined by inflows into open-ended onshore funds, were £66m while total net outflows for the group reached £0.9bn.

Nick McBreen, IFA at Worldwide Financial Planning, said this was not surprising given the trend towards investing in fund of funds, which he said is only going to get stronger with the implementation of RDR.

"If you are going to go down that road, of multi-manager, and you are looking to push away and effectively abdicate responsibility on to the fund house then what value or what expertise are you adding as an IFA?" he questioned.

McBreen added that for some smaller clients with less capital a multi-manger approach could be an effective way to get "trickle down exposure" to fund managers, but otherwise using a platform to gain access to the fund manager directly is the best approach.

He also does not rate the multi-manager proposition from F&C specifically, and said of all the criteria he applies during selection its multi-manager funds "do not float to the surface".

McBreen pointed to only two in the peer group that get his vote, the Henderson Multi-Manager Income and Growth Fund, co-managed by Bill McQuaker and Chris Forgan, and Cazenove’s stable of multi-manager funds.

F&C job cuts

Also in its Q3 results F&C updated investors on its strategic review and Edward Bramson, the group’s executive chairman, announced cost cutting of as much as £33.2m by 2013, which would chiefly be achieved through job losses.

Since he usurped former chairman Nick MacAndrew in February this year, during an extraordinary boardroom coup, Bramson has always intended to streamline the business.

But now he is committing to savings almost three times the amount first announced in January by F&C.

He said the one-off cash cost of the savings was expected to be £14.6m, of which £10.7m relates ro redundancy payments.

This leaves incremental savings of £21.2m, with £16.6m coming from staff reductions and the remainder £4.5m from non-staff reductions.

What next?

The second phase of Bramson’s review will focus on expanding the group’s investment trust offerings and its retail/wholesale businesses (including Thames River).

Bramson was highly critical of F&C’s financing and acquisition strategy when he first set his sights on chairmanship of the group as an activist shareholder.

This included the acquisitions of REIT Asset Management and Thames River.

He was voted in with an overwhelming majority of shareholder votes in February, while 65% voted to oust MacAndrew.

Crucially, he was supported by Aviva Investors, which held around 9% of F&C shares at the time.



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