The regulatory environment for financial advisers means the success multi-asset has enjoyed since the financial crisis will not prove a "flash in the pan", argues RLAM head of multi-asset Trevor Greetham in this video interview.
Talking to Professional Adviser editor Julian Marr in the above video, Greetham highlights how 2016 proved the best year for multi-asset returns for sterling investors since the financial crisis.
Indeed, he adds, when Royal London's Global Multi-Asset Portfolio (GMAP) range celebrated its one-year anniversary in March, performance ran from around 5% for the lowest-risk fund to more than 20% for the pure equity offering.
"We are really happy with that, given some of the surprises we have seen," he says. "Still, we are not expecting 5% to 25% returns every year - it was quite an exceptional start."
Multi-asset has experienced extraordinary growth since - and indeed arguably because of - the financial crisis. How then does Greetham see the sector evolving as memories of 2008/09 fade?
"In the very early years after the financial crisis, there was a sense in some fund management organisations that multi-asset was going to be a bit of a flash in the pan and that, before long, everybody would get back to buying pure equity funds," he replies.
To be fair, explains Greetham, after previous economic shocks and crashes, that is what tended to happen - investors would buy 'balanced' funds for two or three years and then they would return to buying equity funds.
'Change for good'
"What has changed - and changed for good - is the regulatory environment for financial advisers and the way that is feeding through into how end-customers think about investing," he adds.
Clients asked to fill in a risk questionnaire are unlikely to emerge as pure equity investors on the risk spectrum, Greetham argues, adding: "Some people will do - but they are more likely to be in the mix somewhere.
"It is here multi-asset becomes very important - particularly the fact you can offer a range of solutions with different risk profiles but also with quite similar repeatable outcomes."
To watch 'Multi-asset in retirement planning', please click here
To watch 'Grading multi-asset portfolios to match risk appetite', please click here
To watch 'Diversifying to counter market shocks', please click here
To watch ''Clocking' different stages of the economic cycle', please click here
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