Paul Fidell

Senior Business Development Manager

Demand for smoothed Multi-Asset investments ‘set to grow’

18 January 2017

  • Over two thirds of advisers forecast growth for smoothed multi-asset investment solutions over next two years
  • Over half of advisers regularly recommend investing in smoothed multi-asset products
  • But increased competition in sector would boost growth, advisers say

Over two thirds of advisers are forecasting the demand for smoothed multi-asset investments to grow over the next two years as interest in solutions to ongoing market uncertainty builds, research from Prudential1 shows.

Its nationwide study found 37 per cent of advisers expect the pace of expansion in the sector to speed up while 33 per cent forecast the sector will maintain the current pace of expansion underlining support for the sector as a solution for investors seeking protection and growth.

Just 19 per cent of advisers expect the smoothed multi-asset to stall or decline over the next few years highlighting the wide use of the products across the advice market. Over half of advisers say they regularly recommend them to clients with 23 per cent saying they do so very regularly.

However among advisers who do not recommend smoothed multi-asset investments there is concern about a lack of competition – around 30 per cent of those who do not recommend the products are concerned that there is a lack of choice of with-profits providers.

Just 27 per cent who do not recommend smoothed multi-asset investments say they are unhappy about transparency and the sector’s reputation. The main objection is from advisers who prefer to offer their own risk-rated funds.

Paul Fidell, investment expert at Prudential, said: “The smoothed multi-asset investment sector is firmly established on a growth path and all the indications are that advisers expect that to continue or even accelerate.

“There remain concerns about a lack of competition in the sector but the old concerns about reputation appear to have receded although clearly existing providers have to ensure they continue to deliver for advisers and their clients.”

More than half of advisers (55 per cent) who do not recommend smoothed multi-asset investments say they prefer to make their own asset allocation decisions while 48 per cent prefer the simplicity of buying funds through platforms.

Notes to editors

1Adviser research conducted by independent researchers Pollright in October 2016 among 109 financial advisers nationwide.

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