Move focus from monthly performance: ING
The financial services industry should abandon its focus on end-of-month performance figures with investors needing to understand quarterly data at least presents a more accurate picture of manager performance.
ING Investment Managementhas stated the industry must alter its “monthly race for headlines” with ING chief executive officer, Grant Bailey backed by chief investment officer, Geoff Martin and director of Australian equities, John Martin all stating that given the changing role of asset consultants they should regularly publish the performance numbers of the funds they advise on.
Furthermore the investment manager argues that implemented consultant products should also be included in performance surveys.
Looking at asset allocation over the past 10 years, the ING Investment Management team believes it has been characterised by a decline in diversified and balanced funds with an increase in single asset class specialisation, giving rise to a more “implemented” approach by consultants.
It says the result has been a rising influence by consultants over asset allocation decisions at both the strategic and tactical level, with only the trustees of the larger funds still playing an active allocation role.
ING argues that because of this, consultants should regularly publish the performance numbers of the funds they advise on with implemented consultants’ products being included in performance surveys.
Looking ahead, ING suggests that asset allocation strategies will need to become more sophisticated as they are impacted by a lower yield environment, more demanding clients, a broader array of investment choices and the growing importance of international investments.
It suggests international investments will increase in importance and may represent as much as 40 per cent of assets within 10 years.
AUTHOR
Mike Taylor
Recommended for you
As the government announces a public inquiry into the collapse of Dixon Advisory, risk adviser Richard Silberman has detailed the three areas that typically lead to an AFSL's collapse.
With a growing number of advisers now running their own business, they need to pivot their career identity to being a business owner rather than just as a financial adviser if they want to futureproof their business.
Zenith Investment Partners has launched a range of new managed account portfolios over the past quarter, including on Insignia Financial’s Expand platform.
The financial services technology firm has officially launched its digital advice and education solution for superannuation funds and other industry players.
