New research from Aegon has revealed that multi-asset strategies are the top investment choice recommended by financial advisers, with 25% of client assets invested in such funds.
In comparison, Aegon’s latest Adviser Attitudes report, which surveyed 200 financial advisers, found 20% of assets were invested in DFM portfolios, 20% were held in fully in-house portfolios and 18% in externally built model portfolios.
Further down the scale, 12% of client assets were held in single strategy funds and just 1% were invested in individual stocks.
According to the survey, 90% of advisers use multi-asset funds for both client accumulation and decumulation, while the most common reason for recommending the investment structure is the diversification benefits they offer (63%).
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The research also revealed that some 53% of advisers consider multi-asset funds to be the least expensive option, and consequently they were the most recommended structure for clients with less than £100,000, with 60% of those surveyed favouring this option. In contrast, 80% considered DFMs as the most expensive option.
Commenting on the popularity of multi asset funds, Lorna Blyth, managing director, investment proposition at Aegon, said it is likely due to their “considerable versatility and diversity” and the ability to select options that align to different risk appetites.
“Multi-asset funds also offer ease-of-use for advisers and customers, with the permission to make asset allocation changes over time on the customer’s behalf built into the fund design,” she added.
“In addition, they support advisers in meeting their regulatory obligations – such as MIFID II, PRIIPs and new Consumer Duty rules – with target markets’ pre-defined and robust investment governance processes built in.”
