The investment function IFAs are most willing to outsource is asset allocation, with 36% of respondents to a survey by FE Research saying they were looking for a third-party solution.
Principal reasons cited by IFAs for outsourcing investment-related services include compliance and risk (62% of respondents); the need for external expertise (61%); the need for additional resources (52%); and to save costs (39%). The Retail Distribution Review was listed as a decision factor by 22% of respondents.
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However, client communications is one area where financial advisers are determined to keep control, the report says. The majority of respondents (84%) said they wanted to handle client reporting and communications themselves.
Other services that advisers regard as central to their proposition are: portfolio monitoring (82%); conducting attitude to risk questionnaires (76%); and fund selection (71%), the report added.
Surprisingly, very few IFAs plan to outsource stock selection (16%) and trading and implementation (14%), according to the report.
Overall, the survey did not indicate a significant trend towards outsourcing with 40% stating that they do not plan to outsource any services. This is in spite of the fact that the majority of the survey population (67%) consisted of smaller adviser businesses with five or fewer registered employees. Only 33% of respondents had over GBP100 million in assets under advisement.
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By GlobalDataRob Gleeson, head of Research at FE, said: "This survey demonstrates that the relationship between advisers and their clients remains paramount. Providers of outsourced solutions, such as model portfolios, need to acknowledge that IFAs want to remain in the driving seat and to maintain direct contact with their clients."
