In the old days, multi-manager funds were a simple proposition. The fund manager would choose a risk appropriate asset allocation and utilise the specialised skills of a range of leading fund managers to deliver stable returns with lower volatility.
But like most things, it’s not as simple as it used to be. With the industry upheaval following the global financial crisis (GFC), increasing fee pressures and new legislation, multi-manager funds have evolved for a new reality and advisers are taking a fresh look.
For fund managers now there is a greater focus on new investment strategies and absolute returns that meet the clients’ objective.
Back to Basics
Increasing pressures on the traditional financial planner business model, including FOFA changes and the need to demonstrate genuine value, have also sparked renewed interest in multi-manager funds.
Offering time-saving for advisers who don’t rely on active investment skills as the core of their value proposition, multi-manager funds allow advisers to focus on the wealth-planning area of their business and strengthening their relationship with clients. The ability to focus on clients’ needs and re-engage with advice is a major advantage of multi-manager funds according to Dean Lombardo, director at business consultancy ‘effortless engagement’.
In research undertaken by IOOF in July 2014, clients were asked to consider their investment experience in the previous 12-24 months and rate their level of satisfaction with their financial planner. The results showed a high level of satisfaction, however interestingly, there was effectively no difference between multi-manager funds, model portfolios or direct investments – indicating clients value the quality of the advice they receive, the ability to achieve their lifestyle goals and objectives without requiring their advisers to be focused on investment implementation.
With a focus on cost, new opportunities for investments and objective-based outcomes multi-manager funds have continued to transform to meet the requirements of both clients and advisers and will do so in the future.
With IOOF MultiMix you can accelerate your business – by cutting time, not corners. MultiMix is the investment management solution that adds value on three fronts – active asset allocation, active management of high quality managers and active risk management. Our processes have been crash-tested and fine-tuned over decades; our outcomes speak for themselves. So if you’re ready to pick up the pace, then get in contact with us.
