Size isn’t everything – advisers like boutiques

Size is becoming increasingly irrelevant for financial advisers, who are shunning the big institutional fund managers in favour of boutique operations.

A new report, released exclusively to Money Management, found one-third of the fund managers most used by financial planners are boutique operators.

The Assirt Adviser Market Trends Report says the findings are a wake-up call for large managers to rethink the competitive threat of boutiques, with advisers fed up with the “perceived arrogance and inertia of current market leaders”.

The report, which was based on a study of more than 1,500 randomly selected financial advisers, asked planners to nominate the fund managers they used most often, as opposed to the fund manager they invested the most funds through.

It found eight out of the top 25 most-used managers were boutiques.

The three most popular boutiques were Platinum Asset Management, Investors Mutual and Challenger, which all ranked in the top 10 of most-used managers overall.

The survey, conducted by market researcher Vanessa McMahon on behalf of Assirt, found 38 per cent of advisers used Platinum, 24 per cent used Investors Mutual and 20 per cent invested funds with Challenger.

The report says newer players, such as 452 Capital and PM Capital, are also an emerging force in the popularity stakes.

When asked to randomly name top boutique groups, even if they had not used them, financial planners also listed Hunter Hall, IOOF/Perennial, Maple Brown Abbott, HFA Asset Management and Portfolio Partners.

Assirt head Simon Ibbetson says boutiques will continue to increase in popularity.

“They are a breed apart from the mainstream managers, by definition so we couldn’t say they’re becoming more mainstream but they do seem to be growing in popularity,” he says.