Planners move towards asset allocators

25 September 2019

Financial planners continue to outsource the investment selection process and move from being investment pickers to asset allocators, according to the newest research by Investment Trends.

Also, planners started to re-evaluate their product offerings to better accommodate their client’s needs in the post-Royal commission environment, the Investments Trends’ “2019 Adviser Product and Marketing Needs Report” has found.

One of the reasons why a growing number of planners were looking to outsource the investment selection was the increasingly bearish outlook the planners held for the domestic stock market combined with uncertain macro conditions.

Related News:

“Geopolitical risk and share market volatility are the top and growing concerns among planners, with many also keeping an eye on global debt levels and the Australian economy,” Investment Trends’ analyst, Viola Wang said.

Following this, the report found that the proportion of planners directly involved in selecting investments for their client portfolios fell from 56% to 53% in the last 12 months and, at the same time, a growing proportion utilised model portfolios, managed accounts and multi-manager funds.

Diversification was the top concern for planners when it came to selecting investments for their clients (65%) while lower cost products were the second most-cited priority (up from 39% to 42%) alongside capital preservation (down from 54% to 42%).

The report also said that fund managers could stand out by meeting planners’ needs for content and transparency, with Vanguard being mentioned as planners’ most-used fund manager.

“Against this backdrop, Vanguard has further extended its lead as the most widely used fund manager among planners (62% us it for new business, up from 55% in 2018), followed by Magellan (54%) and Platinum (44%). Fidelity (36%) and PIMCO (36%) have made significant gains in the last 12 months to round out the top five,” said Wang.

Recommended for you



Add new comment