Planners shifting away from benchmark hugging managers

planners/financial-planning/financial-planners/FOFA/financial-advice/

5 June 2014
| By Staff |
image
image
expand image

Financial planners have moved away from mainstream broad cap managers who have clustered around the benchmark and are opting to use specialist managers to generate returns and income according to Hyperion Asset Management managing director Tim Samway.

According to Samway there has been a shift in planner thinking since the introduction of the Future of Financial Advice (FOFA) reforms where planners are becoming more critical of the cost of investments compared to the returns they are generating.

He said planners are no longer using high alpha managers who tend to cluster around benchmarks but are instead looking at exchange traded funds (ETF) or direct equities combined with specialist funds from smaller managers.

"Planners are becoming worried when they see broad cap managers all on the same side of the market and are moving away from them and looking at funds that can offer differentiated investments," Samway said.

"I have heard this repeated in dozens of meetings with boutique and large scale practices, including those aligned with institutions."

Samway said that since FOFA planners have developed a greater inbuilt attitude around the interests of clients and have moved away from inhouse products.

He said planners were looking at products which demonstrated they had thought about the client's needs and interests and were examining how funds blend and how they are protecting investment capital.

"Managers have taken the safety route and planners want quality assets that provide growth which is why they are looking at vanilla investments such as ETFs combined with specialist active managers."

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

1 month 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

4 weeks ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

2 weeks 6 days ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 5 days ago

TOP PERFORMING FUNDS