Multi-manager funds are attractive investment options for advisers and their clients. Investors are increasingly aware that asset managers tend to be strong in particular areas and even then will endure periods of underperformance. Advisers also apprec- iate this and spend considerable time selecting the right funds for clients and reviewing portfolios.Over the past few years, advisers have greatly improved their knowledge of portfolio construction and asset allocation. But with a growing administration and compliance burden, coupled with resource constraints, some advisers believe that they need to concentrate on financial planning rather than investment management. They do not have the time or the access to fund managers to be able to select them with confidence and continue to review them on an ongoing basis. When you consider that over 80 per cent of retail funds available to IFAs have lost their fund manager in the last three calendar years, it becomes clear that continually monitoring funds can place a significant cost and resource drain on an adviser’s business. Multi-manager can provide advisers with an ideal solution. It allows them to outsource responsibility for investment selection and concentrate on meeting their client’s holistic financial needs. It means that both the client and the broker are secure in the knowledge that the investment is managed and monitored daily. Outsourcing is not a new trend. The industry has been built on this concept through with-profits, where the chief actuary of a life company takes the investment decisions on behalf of the investor. Multi-manager funds take this concept further and provide a transparent and low-cost method for investors to access some of the world’s best fund managers. Norwich Union sees multi-manager at the core of its proposition and launched a manager-of-manager range of funds across its wrappers to complement its life and pension fund of funds. In October, the range will be complete when the fund of funds is opened to Isas, Peps and unwrapped investments. As the multi-manager market has evolved over the past few years, advisers have also become more aware of the differences between various techniques and processes. There are differences between mana- ger of manager and fund of funds, and it is important that we cater for both markets. Advisers specialise in recommending the right solution for their clients and it is important that Norwich Union gives advisers choice. On the surface, manager of manager and fund of funds are two distinct methods to provide an outsourced solution. However, it is in the underlying portfolio structure and processes where the differences lie. Fund of funds is currently the more popular option for advisers and there have been numerous new entrants to the market. The fund manager selects the best funds from the universe of retail funds, which means that the underlying funds and managers will be familiar to the adviser and, quite possibly, the investor. The advantage for the overall fund manager is that they can actively manage their portfolios and move money quickly and efficiently between companies. The universe that managers can choose includes thousands of funds, so they can construct truly diversified and robust portfolios. Manager of managers focuses more on risk man- agement, with up to 20 managers typically being given mandates to run. The overall manager retains control of the portfolio and concentrates on allocating the different mandates. Should a manager underperform, they are replaced by a different manager. This approach differs from fund of funds, which blends the best managers available in the marketplace. It is clear that the two approaches require different discipline and, hence, Norwich Union uses two managers. Aon manages Norwich Union’s manager of managers funds, which invest primarily with institutional managers with which they have built excellent relationships. On the other hand, IMS, which specialises in the retail market, manages the fund of funds. Both managers are highly regarded and we are delighted to have both on board at Norwich Union.