Adviser reliance on multi-asset funds doubles in focus on costs

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A focus on costs has seen the proportion of advisers relying on multi asset funds double in 2017, research from Aegon UK shows.

Thirty six per cent of advisers predominantly use multi-asset funds rivalling model portfolios, where popularity has dipped from 41 per cent in 2016 to 36 per cent this year.

Last year, a Platforum survey showed only 18 per cent of advisers relied predominantly on multi asset funds.

Aegon investment director Nick Dixon says: “We’ve seen a rise in the popularity of multi-asset funds, as advisers face up to greater cost and regulatory pressures, and look to simplify investment 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.”

Eight per cent of advisers said they relied on DFMs, while 12 per cent counted on single-strategy funds and 9 per cent focussed on stockpicking.

Dixon says Aegon has been investing heavily in its model portfolio functionality for advisers through the Aegon Retirement Choices platform.

“Model portfolios aren’t going anywhere soon,” Dixon argues. “Advisers are, and will continue to, find appetite amongst clients for their uniquely tailored portfolios.”