Martin Bamford's presentation for the BrightTALK Multi-Asset Summit on 16th September 2015. A recent report suggested that nearly half of IFAs are recommending their clients invest in multi-asset investment funds. Increased market volatility appears to have resulted in more IFAs recommending these fund solutions. Despite their rising popularity, are multi-asset funds the panacea they appear to be? Are IFAs delegating too much responsibility for risk management and investment performance when opting for multi-asset funds, instead of constructing a portfolio of single-asset class funds? In this presentation, Martin will explore the arguments for and against the use of multi-asset funds for advised investment clients. His conclusions might surprise you.

1. Why Are IFAs Recommending
Multi-Asset Funds?
Martin Bamford CFP FPFS
Chartered Financial Planner

2. Introduction

3. Research
 Baring Asset Management Investment Barometer
 47% of intermediaries encouraging clients to invest in
multi-asset products
 Up from 36% last time they asked
 Highest since question first asked in Q2 2011

4. Definition
 Combination of asset classes in one fund
 Manager responsible for asset allocation & stock selection
 IMA Mixed Investment sectors

5. The Bad Old Days
 Cautious, Balanced, Active Managed
 Half of cautious managed funds invested in alternative
investment strategies
 “Barclays fined £7.7m for Aviva fund sales failings”
 Mixed Investment
 “provide greater clarity to consumers”

6. Weak reasons
 HSBC – interview of 200 intermediaries
 Most important factors:
 Client knowledge of the provider
 Existing relationship with provider
 Least important factor:
 Skill & expertise of fund manager

7. Better reasons
 Consistency of performance
 Risk-adjusted returns
 Cost
 Skill & expertise of fund manager

8. Sector performance
 Mixed Investment 40-85% Shares cumulative performance:
 0.69% 1 year
 20.89% 3 years
 31.74% 5 years
 UK All Companies cumulative performance:
 1.55% 1 year
 31.35% 3 years
 50.04% 5 years
Source: FE 15th
September 2015

9. Mixed Investment 20-60% Shares
 139 funds in this sector
 Ongoing Charges range from 0.24% to 3.8%
 One year performance range from -7.75% to 7.19%
 Volatility ranges from 0.63 to 2.65

10. Why?
 Fire & forget solution
 Abdicates responsibility
 Lack of in-house resources
 Focus on Financial Planning

11. Getting better
 Risk target managed funds
 Run to stay within risk profile boundaries
 Offers suitably diversified exposure

12. Even better
 Determine strategic asset allocation
 Make tactical adjustments
 Populate with single asset class funds

13. Get in touch
 martin@icfp.co.uk
 @martinbamford
 www.icfp.co.uk