UK financial advisers are encouraging clients to turn to multi-asset investing as their sentiment towards the asset class hits an all time high, according to research from Baring Asset Management.
Barings’ study found that more than a third (36%) of 114 UK financial advisers are recommending multi-asset products to clients as a response to market volatility.
More than a quarter of intermediaries say they are ‘very favourable’ towards multi-asset products, the highest number since Barings began the research in 2010.
Barings’ latest Investment Barometer also shows a particular interest in multi-asset growth and income funds. Nearly half (46%) of the advisers surveyed reported plans to increase exposure to multi-asset growth funds – a 16% increase compared to research by the firm in 2014 – and two in five intermediaries said they intend to increase client exposure to multi-asset income funds over the next 12 months.
Rod Aldridge, head of UK wholesale distribution at Barings, says the increasing popularity of multi-asset investing in the UK is driven by the fact that multi-asset strategies aim to deliver equity-like returns with less risk than holding an equity-only portfolio.
Aldridge predicts an increasing need for products that are designed to provide a regular income while minimising risk in light of UK pension reforms. A rule change means retirees from defined contribution funds can drawdown their pensions in different ways, including by leaving their fund invested and drawing an income from it.
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