Fresh concerns among advisers about how the Financial Services Authority (FSA) may view their tactical asset allocation calls are helping to drive the growth of discretionary fund managers (DFMs), according to Ascentric chief executive, Hugo Thorman.
Speaking at the Defaqto DFM conference on Tuesday, Thorman said it would be a "brave move" to contradict risk profiling tools recommending balanced portfolios without the safety net of a DFM.
"Most advisers agree that bonds at the moment - whether sovereign or corporate - are priced high, and the next movement will be down," he said.
"But your risk tool will tell you that you need to have a chunky amount of a client's portfolio in bonds. Only a DFM can take a brave step and veer away from that. Some of you will [tactically allocate], and I'm sure it will have to be very well documented."
The number of IFAs using DFMs has continued to grow, with the latest figures suggesting around 60% of firms outsource part or all of their investment proposition - 10% higher than the same time last year.
According to research from Investec, around one in five advisers outsource because of regulatory pressure arising from the Retail Distribution Review (RDR).
Smoking biggest culprit; obesity second
Average earner will gain £840 in 2018
Will also move heritage items
Responding to letter from Treasury Committee chair Nicky Morgan