According to a study, by Seneca IM, there has been a long-running debate around the value of boutique versus traditional investment brands with three quarters (74%) of advisers citing investment performance as the most important factor in multi-asset fund selection.
In contrast, the brand of the investment provider was considered the least important factor for 37% of advisers.
Fees have come under scrutiny recently and competitive charging featured within the top three considerations in over half (54%) of advisers’ minds regarding their selection of multi-asset provider.
This was likely compounded by the controversy surrounding unscrupulous high fee-charging closet trackers, in combination with the raft of regulation coming from the FCA and European Securities and Markets Association (ESMA) intended to drive fairer outcomes for investors, Seneca says.
The diversification benefits were regarded as an important consideration for more than half (52%) of advisers, while an easy to understand investment process (49%) was also cited among the most important considerations.
Looking ahead, advisers appeared bullish on multi-asset strategies and intend to allocate a greater proportion of client assets to this type of strategy.
Nearly two-thirds (60%) of advisers planned to steer more of their client’s money to managers who specialise in multi-asset strategies.
Just 1% of the advisers surveyed said they intended to reduce their allocation to multi-asset funds, while over a third (39%) expected their allocation to remain at the current level.
David Thomas, chief executive of Seneca Investment Managers, said: “Size, and brand can sometimes be an unnecessary distraction for intermediaries when looking to provide themselves and clients with reassurance, and can often get in the way of delivering real value to clients.
“Our research highlights how advisers are increasingly focused on the issues that matter most to their end clients when selecting a manager.
“Tangibles such as investment track record and the investment process, are now more important than intangible factors associated with a manager’s size or brand.
“Specialist boutique managers are able to deliver risk-adjusted return and invest with conviction without being distracted by the demands of a large organisation.”