The majority of advisers favour outsourcing investment management to a discretionary fund manager (DFM), research suggests.
According to a recent survey carried out by wealth manager Heartwood polling 178 advisers, almost half (43%) already outsource client portfolios to DFMs with a further 13% set to do so.
Furthermore, among those already outsourcing, over a third (36%) plan to increase the number of client portfolios managed by a third party.
Heartwood said the Retail Distribution Review (RDR) has boosted the popularity of outsourcing solutions.
When selecting a DFM, an overwhelming 90% of those polled cited track record as a vital consideration, followed closely by a pledge the core client relationship would not be jeopardised (87%).
A significant majority of 83% also think the ability to offer a transparent, repeatable and scalable investment process is key, in addition to keeping costs reasonable (79%).
Despite the strong swing towards DFM solutions, the research also found advisers have concerns over client ownership and the overall client experience.
Almost three-quarters (72%) cited lack of control over the investment process as reason for not choosing a DFM while more than half (57%) were concerned about increased charges.
"This research clearly underlines that using a DFM or investment manager is rapidly growing in popularity among IFAs, and the onset of RDR will stimulate the market even further," said Heartwood Investment Management head of intermediary sales Mark Rockliffe.
"However, there is still concern among some IFAs about outsourcing to a DFM, and it is important that both parties fully understand how a strategic partnership can enable both parties to concentrate on what they do best."
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