Liontrust research: advisers call for increased transparency | What we think | Liontrust Asset Management PLC

Liontrust Adviser Research Report

Advisers call for increased transparency

Advisers have called for outsourced investment managers to increase transparency around costs and charges and to provide greater value for money. But advisers don’t believe cheap is best and are prepared to pay more money for consistent performance and better services.

In new and exclusive research for Liontrust, the specialist asset manager, 91% of advisers say value for money is important when selecting an outsourced investment partner. The most popular determinant for value for money is the best return for the best price, which is cited by 73% of respondents.

This is followed by excellent administration (60%), superior service (50%) and good quality reporting (42%) in delivering value for money.

Of those questioned, 41% say they believe they pay too much for the returns generated by their investment partners. But cheap is not best as 91% of advisers say they are willing to pay more for consistent performance and 74% add that they are willing to pay more for better service which goes beyond performance.

Two-thirds of advisers (63%) will dismiss an outsourced partner for excessive costs and a similar number will do the same should the firm deliver a poor service (55%).

Advisers also want greater transparency from their outsourced managers. According to the research, 43% of advisers do not believe investment partners are transparent enough when it comes to fees and charges.

While 80% and 78% of advisers respectively say it is their responsibility to ensure the suitability of the funds and portfolios they offer on an initial and ongoing basis, 36% admit they are finding this challenging.

Of the advisers questioned for the research, they use outsourced investment solutions for an average of 51% of their client base.

John Husselbee, Head of Multi-Asset at Liontrust, said: What is clear from this research is that transparency, value for money and suitability are of prime importance to advisers in ensuring a successful outsourced investment partnership.

 

“The onus is on investment managers to demonstrate how we can deliver added value to advisers and their clients and how we can help advisers with their challenges such as suitability.

 

“It is not surprising that the best return for the best price is the most important factor in determining whether advisers and their clients are actually getting value for money.

 

“And it is a success for active managers that 91% of advisers say they are willing to pay more for consistent performance.”

 

For the purpose of this study, the term investment partner has been used to reflect advisers using not only personalised DFM services, but also model portfolio, multi-asset and fund of fund solutions from providers. The research was conducted in two stages with 10 qualitative interviews preceding a quantitative survey of 100 advisers.

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Key Risks & Disclaimer
 
Please remember that past performance is not a guide to future performance and the value of an investment and any income generated from them can fall as well as rise and is not guaranteed, therefore you may not get back the amount originally invested and potentially risk total loss of capital. 
 
This content should not be construed as advice for investment in any product or security mentioned, an offer to buy or sell units/shares of Funds mentioned, or a solicitation to purchase securities in any company or investment product. Examples of stocks are provided for general information only to demonstrate our investment philosophy.  It contains information and analysis that is believed to be accurate at the time of publication, but is subject to change without notice. Whilst care has been taken in compiling the content of this document, no representation or warranty, express or implied, is made by Liontrust as to its accuracy or completeness, including for external sources (which may have been used) which have not been verified. It should not be copied, faxed, reproduced, divulged or distributed, in whole or in part, without the express written consent of Liontrust.
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