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Generalists could face delegating investment business

General practitioner IFAs may be pressed in to referring their investment business to manager of manager firms as a result of the Sandler review, according to influential analyst Ned Cazalet.

Cazalet, principal of Cazalet Financial Consulting, says the Sandler team is getting industry feedback suggesting that generalist IFAs do not have the time or resources to monitor on a weekly basis the myriad investment funds, processes and risk management of all the different companies.

He says the answer is not to force general IFAs to take a host of exams or ban them from selling funds but to seek to encourage them to delegate investment responsibilities to specialists such as Selestia and SEI Investments.

But IFAs disagree with Cazalet&#39s assessment, saying that poor fund performance is the fault of fund managers, not IFAs, and that clients should be free to choose where they receive advice.

Cazalet says: “Funds need to be monitored on a day-to-day basis and there needs to be knowledge of the issues – style, process and risk management. If there is a clampdown on the investment practices of IFAs from the Sandler review, it may be towards delegating to manager of managers.”

IFA Michael Philips proprietor Michael Both says: “For Sandler to do this would not be the answer. Performance is not the fault of IFAs, a dead sheepdog would do a better job than most fund managers at the moment. Investors should have the choice where they get advice.”


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