Almost a third of investment advisory firms are outsourcing discretionary management, with most citing knowledge constraints, a Close Asset Management study suggests.
The group's inaugural Adviser Insight survey found 28% of almost 400 IFA respondents now outsource fund management responsibilities, with almost three quarters (74%) of those acknowledging asset managers are better equipped to manage clients' investment portfolios.
Elsewhere, 14% of respondents blamed time pressures for choosing to outsource, while the remainder cited a preference for daily active fund management, the delegation of responsibility and client choice.
According to 28% of the IFAs surveyed, companies struggling to meet the change in requirements post-RDR and those without FSA approval are best suited to outsourcing.
Meanwhile, 8% of those polled thought outsourcing could also be a solution for advisers looking to exit the market post-RDR.
"The past two years have been extremely challenging for financial advisers as they have faced historically-difficult market conditions, unprecedented regulation and a massive loss of consumer trust in the industry," Close director of intermediary sales David Muncaster says.
"Managing client portfolios requires a specific investment skill set as well as the adviser's time, and it is not surprising there is a growing demand for outsourced discretionary management.
"As we approach the implementation of the RDR, we will begin to see a move towards outsourcing discretionary management across the industry."
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