Half of IFAs plan to boost multi-manager exposure in 2008

One in two IFAs plan to boost the amount of assets they place with multi-managers during 2008, according to research from Resolution Asset Management and Simply Biz, the compliance services provider.

The survey, undertaken in conjunction with registered members of Simply Biz, reveals that 50 per cent of advisers plan to invest more of their clients’ assets in multi-manager funds during the year. Forty-six per cent expect no change in the level of business they conduct with multi-managers while just 4 per cent anticipate a fall.

Of the IFAs who plan to boost their multi-manager business, almost half – 48 per cent – expect it to rise by 10-20 per cent, while 18 per cent anticipate a rise of 21-30 per cent. Almost one in ten – 8 per cent – expect an increase of more than 50 per cent.

The survey, which is based on 122 responses, reveals that diversification is the key driver behind IFAs’ increasing use of multi-manager. Thirty-six per cent said diversification of manager was the main reason behind their use of multi-manager funds, while 32 per cent highlighted diversification of asset class. Seventeen per cent said market conditions had a big impact on their use of MM funds while 5 per cent said brand played a key role.

Price was also found to be an important factor in fund selection, with more than two thirds of respondents – 69 per cent – asserting that cost considerations have an impact on their decision. Thirty-one per cent said price is not a factor.

Jonathan Polin, director, Resolution Asset Management, says: “Diversification of fund manager is clearly a huge concern for advisers, which was a central consideration for Resolution when we launched our multi-manager boutique, Maia, last year.

“Multi-manager funds are forming an increasingly important part of IFAs’ client portfolios and there is no doubt that this trend is set to continue. With alternative assets poised to play a growing role in multi-manager funds, I believe this form of investment will only grow in popularity and continue to demonstrate its importance to IFAs seeking diversification.”