How many advisers have in the last three months seen a company present to them about how UK smaller companies is the place to be for 2006 and then how many of the same advisers have also heard from another company telling them that UK big companies is the place to be? Quite a few, I suspect.The industry is full of mixed messages and it can be difficult for an adviser to hear themselves think with the volume of suggestions and views from commentators. If we sit down and think about any market or asset class, it is easy to come up with reasons to buy or avoid an area but who do you listen to? Is it the large-cap specialist telling you the sector is undervalued or perhaps the small-cap specialist reminding us that small firms offer long-term opportunities. Both could well be right and their arguments equally valid but the consequence of the adviser getting it wrong can be costly. Just look at the impact of getting the sector right or wrong over the past three years. For the three years to the end of 2005, the FTSE Small Cap (ex IT) index outperformed the FTSE 100 index by 31.1 per cent. But it is not only about selecting the right sector, you have still got to pick the right fund or your hard work has been wasted. Staying with a UK smaller companies theme, there is a difference of over 130 per cent between the best and worst-performing funds in the sector over the same period. It is not just over the longer term that this matters – there is a difference of over 40 per cent between the best and worst fund in Japan over the past 12 months alone. Asset allocation is important but fund selection is equally so. With fund selection crucial, it is then imperative to keep up with the latest events on the funds being used. It is no surprise to see the demand for multi-manager products continues to grow. Styles come and go, fashions change and this can happen quickly, leaving you to try and rearrange all of your clients’ assets to keep up with the latest events.