Professional retail fund selectors are increasingly turning to active strategies to help navigate volatile markets, as advisers look for ways to help retired clients manage inflation, drawdowns and cash flow needs.
A survey by Rathbones found 95% of IFAs, discretionary fund managers and private bank fund allocators say market turbulence makes active management easier to explain to clients.
Trust and longevity were identified as the most important qualities in an active manager, while risk management, return potential and downside protection were also cited as key priorities.
Rathbones said drawdown management is another key focus for clients with cashflow requirements, particularly those in retirement. More than nine in 10 (93%) respondents describe this as very important, including one in three (30%) who view it as critical.
Absolute return is the preferred approach for 52% of respondents, compared with 43% who favour relative return. A further 5% say they assess managers’ strategies case by case.
Tom Carroll, CEO of Rathbones Asset Management, said: “Periods of market stress can sharpen the case for active management. Advisers are looking for managers who can combine judgement, risk discipline and clear communication, particularly when clients are under pressure to make short-term decisions.
“For retired clients, that support can be especially valuable, where drawdown management and long-term confidence matter alongside returns.”
The research also highlighted the importance of active managers’ commentary and market insight in supporting client conversations. Some 97% of respondents say these contributions can support constructive investor behaviour during volatile markets, while respondents also noted this support helps clients remain focused on long-term objectives and avoid reactive decisions.
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