Some 57% of advisers have said they plan to outsource to discretionary fund managers (DFMs), according to research released today.
Figures from asset management company Investec showed the number of advisers who currently outsource to DFMs will increase 10% to 57% (from 47%) this year.
The research was conducted by Investec who interviewed 249 intermediaries in November last year.
The most popular reason for outsourcing among advisers who have not used DFMs to date is the delegation of the day-to-day investment management process (89%); followed by the access it provided to an investment professional (82%), and third, to help manage their growing administrative burden (73%).
The most important criteria cited by advisers who were questioned were quality of service; the ability to develop a trusting, personal relationship; cost; transparency of charges; and investment performance.
As well as the growth in DFMs, a third (34%) of advisers also plans to increase the number of client portfolios held on platforms. Currently, financial advisers outsource 11% of the client investments to DFMs via a platform and the average number of platforms used is three.
The research also found that one in five (20%) financial advisers who already use DFMs say they will be increasing the number of client portfolios outsourced due to the Retail Distribution Review (RDR).
Head of intermediary services, Investec Wealth & Investment, Mark Stevens, said: "The research shows that RDR has been a tipping point in the use of DFMs among advisers as the challenges of operating successfully in a new environment bring the benefits into sharp relief."
‘Important to have an anchor’
Report to be written by TPR
Lack of innovation for solutions
Some 2,000 consumers affected