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Outsourcing trend for IFAs

IFAs are increasingly outsourcing structured product assets to discretionary managers.

Speaking at a Money Marketing structured product round table, Quantum Asset Management chief executive Mark Mathius said the firm has always targeted investment specialist IFAs for business.

He said: “We have tended not to focus on the networks and the large IFA community who probably have smaller investment portfolios and more of a general practitioner type of business. We will always offer training and advice to try and grow that market but in the end it is down to them to decide if they are going to advise on a particular product area.”

Blue Sky Asset Management product development director Mark Dickson said the company had a similar target client base and over half of its business involved constructing bespoke products for clients.

Helm Godfrey managing director Bruce Wilson said that structured products can be problematic for small IFAs who may not have adequate resources to research them properly. He said: “It is a specialist area. Big companies can do a lot more research.”

Bestinvest senior investment adviser Adrian Lowcock said structured products are not straightforward and outsourced investment management could provide the solution for advisers.

He said: “The average IFA has got lots of things to worry about and does not always get the time to research these products sufficiently. You need someone else who can do that to allow them to concentrate on their core skills.”

NDF Administration said it employed people specifically to educate the broader IFA community about structured products but acknowledged they did not suit all advisers.

Barclays Wealth director Colin Dickie said: “It is their choice entirely to participate or not, we can only put our information out there.”


Incentive themes

This year’s Budget is bound to attract more attention than usual. All eyes will be on the size of the rabbits that the Chancellor is going to have to pull out of the hat in order to help move the economy out of recession.

Gaining useful Insight on income

Insight Investment has launched Insight UK equity income booster, a UK equity income fund that uses derivatives to boost income and reduce volatility.


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