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&#39Technical hitches hold back sales&#39

A shake-up is needed in the way that investment trusts are marketed and distributed, according to delegates at a round table meeting in London last week organised by Money Marketing and Sway.

A panel of 24 directors, analysts, technical and marketing experts met at Somerset House to discuss ways to increase the distribution of trusts.

Delegates called for a fresh look at how the sector is marketed to deliver trusts to a wider audience.

Sway chief executive and former Legal & General director Jon Maguire said the technical nature of investment trusts is a hindrance for many IFAs.

But investment trust companies were keen to highlight developments in the market that could increase the attractiveness of the asset class. These include moves towards open architecture, the potential development of real estate investment trusts, wraps and multi-manager products and changes to commission.

DWS managing director of investment trusts James de Sausmarez believes individual fund managers have a responsibility to promote trusts.

But most of the panel felt the way IFAs are paid is the biggest hindrance to marketing.

Arbuthnot analyst Tom Tuite-Dalton said investment trusts are unattractive to intermediaries because they do not pay commission.

Tuite-Dalton said: “I am sure that fee-based advisers are more inclined to invest in investment trusts.”

De Sausmarez said: “Regulation works against us. Investment policy and the structure of trusts makes them difficult to understand.”

Sway director Graham Hooper said: “I think that when we see depolarisation it will offer more opportunities. But you have to be careful about what you mean by fee as it could be just commission in another guise.”


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