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PruFunds review claims outsourcing arrangements are transparent

Prudential’s suite of multi-asset funds has seen a surge in demand from investors approaching retirement with APE sales of funds in the PruFunds range increasing 29 per cent to £564m in the first half of the year.

Total assets under management in the range, which is used by more than 4,000 advisers, now sit at £30bn.

Prudential recently commissioned an independent review of its smoothed multi-asset PruFund product suite to assess whether the range meets advisers’ due diligence requirements.

The review, conducted by AKG, assessed the funds’ approach to investment and risk management as well as the governance structures and processes.

Findings by AKG deemed the range to be transparent in allowing advisers to see which part of the investment process is being outsourced to Prudential Portfolio Management Group – a team of 80 in-house investment specialists.

Prudential head of business development Paul Fidell says: “Asset allocation is a highly specialist skill and many advisers are recognising the benefits of outsourcing this part of the financial planning process. Outsourcing does not, however, mean an abdication of responsibility and it is vitally important that advisers understand not only the features of the products that they are recommending to their clients but also the governance and management structure that sits behind them.”

He adds: “For advisers who are supporting their clients to achieve a steady return from their investments, particularly in retirement, balancing a client’s appetite for risk and their need for a certain level of return continues to be challenging. Smoothed multi-asset funds are proving increasingly popular in meeting these requirements.”

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