Multi-manager is a growing business for European distributors, according to research by Fidelity International.
Fidelity surveyed more than 500 individuals from asset managers, insurers, IFAs and retail banks in 10 European countries.
The investment manager found IFAs focused on wealth management use multi-manager to outsource fund selection to focus on holistic financial planning.
Simon Ellis, managing director of Fidelity's multi-manager business, tells IFAonline: "A number of IFA firms are looking at how to not only consolidate their clients' investment on supermarket or wrap platforms, but also how to extend their proposition to providing dedicated but outsourced funds for their investors.
"This is a business we are interested in. Ultimately the idea of having an advice process which follows a consistent risk reward profiling method which in turn leads clients into funds designed to deliver just that profile as a 'default' should improve the quality of advice."
The research also found almost 90% of European distributors have clients invested in multi-manager products. Of those, an average 32% of clients invest in multi-manager products.
Multi-manager is the most popular in Austria, where 100% of respondents have clients invested in multi-manager. France follows with 95%.
Ellis says: "France and Austria are high due to the fact that these multi-manager markets are more mature, but also because many distributors in these countries offer in-house products as a core, single investment solution for clients.
"These distributors realised some time ago that multimanager gave them an opportunity to take a step towards 'open architecture', while still keeping the assets in-house. However, this is changing with the trend toward using external multimanagers in addition to in-house multimanager products."
The Netherlands has the largest percentage of client base invested in multi-manager at 52%, followed by Benelux at 45% and France at 36%.
Industry experts believe Sweden will see the trend’s biggest growth over the next one to three years, at 89%. Italy and Spain follow at 81% and 74%.
Ellis says: "It is interesting to see that Sweden's adoption rate is quite high at 93%, yet the client usage rate is so low. Probably because they are relatively early in the product acceptance cycle, i.e. distributors are getting it on the shelf, but the individual advisers and bank reps aren't comfortable with the products yet.
"However, distributors in Sweden recognise that multi-manager will become a more meaningful part of their business going forward."
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