The financial strength of a fund manager is as important a criterion as investment skill for adviser investment choice in the current market, according to Tyndall managing director Brett Himbury.
“This is a really tough environment for all businesses, fund managers included [and] potential manager’s financial strength cannot be overlooked by advisers on behalf of their clients,” he said.
At a “time when revenues are clearly under pressure”, advisers who focus solely on the investment skill of a manager do so at their peril, Himbury said.
“They must establish if a manager is making a profit, has a diverse revenue stream, and has adequate resources in place to manage client servicing requirements — as well as making sure the investment professionals are entirely focused.”
Himbury emphasised that he was not targeting boutiques by issuing this warning, as boutiques “can be as financially strong as corporates”.
“Rather, it’s simply a question of advisers making sure the manager [can] add value to client investments in this type of market.”
