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Advisers choose performance over brand when considering multi-asset investment options

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Advisers favour performance over brand recognition when it comes to choosing a multi-asset fund provider, according to new research from Seneca Investment Managers (‘Seneca IM’), a boutique, multi-asset, value investment specialist.

According to Seneca IM, there has been a long-running debate around the value of boutique versus traditional investment brands with three quarters (74 per cent) 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 per cent of advisers. 
 
Fees have come under scrutiny in recent times and competitive charging features within the top three considerations in over half (54 per cent) of advisers’ minds regarding their selection of multi-asset provider.  This has likely been compounded by the controversy surrounding unscrupulous high fee-charging closet trackers, in combination with the raft of regulation coming from the Financial Conduct Authority (FCA) and European Securities and Markets Association (ESMA) intended to drive fairer outcomes for investors.
 
The diversification benefits are regarded as an important consideration for over half (52 per cent) of advisers, while an easy to understand investment process (49 per cent) is also cited among the most important considerations. 
 
Looking ahead, advisers appear bullish on multi-asset strategies and intend to allocate a greater proportion of client assets to this type of strategy. Nearly two-thirds (60 per cent) of advisers plan to steer more of their client’s money to managers who specialise in multi-asset strategies.  Just 1 per cent of the advisers surveyed intend to reduce their allocation to multi-asset funds, while over a third (39 per cent) expect their allocation to remain at the current level.
 
David Thomas, Chief Executive of Seneca Investment Managers, says: “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.” 

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