A discretionary approach to investing can benefit adviser clients by generating long-term, enhanced, risk-adjusted returns, says Cazenove Capital head of discretionary fund management Nick Georgiadis in this video interview.
Asked by Professional Adviser editor Julian Marr in the above video what he considers to be the principal benefits of a discretionary approach to investing, Georgiadis says it allows advisers to escape the burden of research and monitoring investments.
It should also enable advisers to present a more sophisticated investment solution to clients, he argues, as good discretionary fund managers have both the resource and expertise to access a broad range of investments.
"The resulting multi-asset approach should produce long-term, enhanced, risk-adjusted returns and allow us to meet client return objectives with the lowest possible level of risk," Georgiadis adds.
'More building blocks'
In a low-growth, low-inflation environment, Georgiadis says adopting a multi-asset approach offers more building blocks from which to construct portfolios.
"There is a greater likelihood we will be able to produce returns that remain acceptable to clients, with the lowest possible level of risk," he says. "The focus is very much on total return because it is clearly quite difficult to find decent levels of income these days."
Indeed, he warns, buying portfolios weighted too much towards income-producing assets can end up proving to the detriment of total return.
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