Advisers will increasingly have to justify their fees or commission and prove their advice adds value to a client portfolio. This will lead advisers to polarise towards specialist areas of advice where value and technical knowledge can truly be recognised and where ongoing advice is essential from an investor’s point of view.
Whether this involves pensions, inheritance tax planning or straightforward portfolio investment, the multi-manager product will be absolutely essential if proper ongoing advice and support are to be delivered.
When we take on a new client at Premier, we ask them to be clear about what they are trying to achieve. We aim to establish a benchmark by which their investment performance can be judged. If we are to look after a portfolio effectively, we must have access to the very best performing funds and also multiple asset classes. A multi-manager product is essential if proper periodic reviews are to take place and portfolio adjustment and reallocation are to be professionally achieved.
The Pensions Act will bring about an explosion of options for pension funds and a multi-manager product will not only be desirable but in some cases a vital component of ongoing pension advice.
It is my belief that a multi-manager investment with a comprehensive choice of fund management groups is the only way to advise clients on the increasingly growing market for inheritance tax planning.
Historically, with-profits bonds have been well oversold, never more so than in respect of trust planning. The argument of smoothed long-term performance for trustees has been blown out of the water by the with-profits problems.
The great advantage of a multi-manager product is its ability to reshape and restructure a portfolio within the investment wrapper without having to encash and reinvest, not to mention the benefit of having no initial charges on fund switches.
Trust money is there for the long term and companies such as Skandia, Selestia and AIG, to name but a few, offer a good selection of trust choices and reasonably competitive multi-manager propositions.
Any adviser who confidently delivers ongoing client support and service can comfortably take commission or fees from such an arrangement, safe in the knowledge that regular reviews with the trustees will be backed by the facility to take cost-effective action with regard to portfolio alterations, with the minimum of disruption and administration for the adviser and the trustees. Multi-manager propositions that are backed by online support and access to valuations give an even greater benefit to the adviser.
Any adviser involved in long-term investment, such as pensions, inheritance tax planning or trust planning in general, must consider the multi-manager option if they want to remain competitive. In the long term, we all have to put our trust in multi-manager.