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Multi-manager fund use set to grow

Four out of five advisers recommend multi-manager funds and over two-thirds expect this to increase over time.

Research from Fidelity which surveyed 163 advisers found that 82 per cent of advisers use multi-manager funds with 22 per cent using them for more than half of the business they do.

Ninety per cent of advisers said they believed that clients benefit directly from access to a diversified portfolio, while 76 per cent thought clients benefited from access to a range of best-in-breed funds for a small minimum investment.

Advantages of multi-manager to advisers surveyed included ongoing monitoring and portfolio oversight, the ability to outsource fund selection and part of the adviser’s management of regulatory risk.

Fidelity’s multi-manager business Simon Ellis says: “We have seen a significant shift towards the use of multi-manager funds in recent years, with 2006 continuing this trend. We expect growth to continue as IFAs use them in more situations and within more product wrappers – our latest prediction is an average annual rate of 18 per cent between now and 2009.

“The concept of multi-manager investing is a win-win situation for advisers and their clients alike. For example, with over 2000 UK equity funds registered for investment in the UK alone, selecting and monitoring them can be a time-consuming task. Choosing a multi-manager fund frees up some of this time for advisers – time that can be spent with existing clients or in developing new business.”

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