Some 52% of advisers say they plan to increase their use of discretionary fund managers (DFMs) over the next 12 months, over double the number in 2012, according to research.
The report from Investec Wealth and Investment questioned 249 advisers on their use of DFMs and found that the percentage of IFAs planning to increase the number of their portfolios was up from 20% before the onset of the Retail Distribution Review (RDR) in November 2012.
Some 70% of advisers are now outsourcing some of their portfolios in this way, up 10% on 2011. On average, those advisers questioned were outsourcing 16% of their client portfolios to a DFM, up 5% on November 2012.
According to the research, a key reason for the increase in the use of DFMs is the benefit it provides to clients, with 60% of IFAs saying that outsourcing has a positive impact on their clients, particularly during a period when many advisers have been adjusting their businesses in light of the new regulatory regime.
The report also indicates that RDR has had an impact on advisers' commercial outlook, with IFAs more focused on maintaining or shrinking the size of their client base than growing it.
More than half (53%) said their key priority since RDR has been to consolidate their existing client base and 9% have been taking steps to reduce it in order to improve quality and focus on more profitable business.
A minority (38%) reported that they had been trying to grow their business by attracting new clients.
Investment Wealth & Investment head of intermediary services Mark Stevens said: "As we anticipated last year, RDR has signalled a flight to quality among advisers looking to build strong links with DFM partners.
"RDR has been a tipping point in the use of DFMs as the challenges of maintaining the size and quality of their client base in a new environment bring the benefits into sharp relief.
"We have seen a sustained increase in both the quantity and quality of our DFM partnerships over the past 12 months and we firmly believe this trend will continue as the benefits of this approach become more widely appreciated among advisers."
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