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How and where adviser firms are using multi-asset strategies

2 July 2018

Multi-asset strategies are proving the most popular retirement strategy, with advisers placing 40.7% of retiring clients’ assets into them, according to new research by Aegon.

For wealthier retiree investors with savings of more than £200,000, multi-asset remains the top strategy, albeit with a slightly lower than average amount being placed (31.6%). Aegon said for wealthier investors, advisers tend to place an above-average proportion of assets in in-house model portfolios – 29.7% compared with the average 18.6%. A greater proportion of wealthy clients’ assets are also allocated to equity income, equity growth and fixed income funds, the research showed.

Meanwhile, multi-asset also ranked highly among growth investors, with just under a third (29%) of clients’ assets going into them.

However, the research revealed marked differences in strategies according to the size of the investment. For multi-asset strategies, usage was at 37.6% among clients with pots of less than £100,000, yet a much lower 15% for clients with more than £200,000. Aegon said the difference was likely to be driven by suitability of advice models for different client types and what clients can afford.

The pension provider also highlighted a falling trend in the percentage of assets going into multi-asset funds as firm size increases. As much as 41% goes into multi-asset funds at firms with assets under management of less than £5m, reduced to 21.5% for firms with over £100m AUM.

Nick Dixon, investment director, Aegon, said: “We are seeing an increase in adviser assets moving into multi-asset strategies which are popular in both the growth and decumulation phases.

“As well as the advantage of being easily accessible, asset allocation changes are administered within the fund itself for simplicity and tax efficiency. And by doing the heavy investment lifting, multi-asset funds free up advisers to focus on financial planning, tax advice and client relationships.”

Professional Paraplanner