Prudential Reveal Concern Over Asset Allocation And Fund Selection
on: January 15, 2010, 6:29 am
Prudential has revealed new research* that shows nearly six
out of 10 financial advisers are concerned about possible regulatory
action over asset allocation and fund selection decisions. The research
found that 39 per cent of advisers are concerned they could face
problems justifying decisions while another 19 per cent are concerned
but have plans in place to deal with potential regulatory issues.
The survey from Prudential also shows that 50 per cent of advisers would welcome
support from providers on asset allocation and fund selection as they battle to cope
with the fallout from the recent extreme stock market volatility.
With the research showing advisers currently spending around five hours per week on
asset allocation and fund selection, 56 per cent of firms say expertise in these
areas is important to the success of their business model. One in five advisers
suggest that this activity could be outsourced.
Andy Brown, Director of Investment Funds at Prudential, said: "The
unprecedented economic and market events of the past 18 months have increased the
need for advisers to help their clients understand the implication of their risk and
"Providers should be doing more to support advisers and giving them access to
expert advice and help. It is in the interests of advisers and providers to come up
with innovative solutions that meet clients' expectations and their assessed risk
"Asset allocation and fund selection are vital in ensuring that client needs and
long-term investment expectations are met. However, both are potentially demanding
and time-consuming. Finding reliable sources of both can enhance the service
advisers offer to their clients.
"We believe that the interests of intermediaries and their clients are best served
by providing risk-rated portfolios that can be mapped to the independent profiling
systems used by advisers to assess their client's attitude to risk. This is a
better solution than relying on tools offered by product providers."
Prudential and Old Broad Street Research (OBSR) have been working together since
2008 on the PruSelect fund range which offers 100 'best of breed' funds as part of
a drive to help advisers with fund selection and asset allocation.
Andy Brown continued: "This research demonstrates there is a real need for support
from providers to help advisers with the increasing regulatory pressure they face.
In addition, the time advisers are currently spending on asset allocation and fund
selection cannot be underestimated. We only see this requirement increasing over
the next 12 months and we estimate more advisers will look to providers for support
in meeting their regulatory obligations."
Prudential's research also reveals that only just over half of advisers (52 per
cent) say they feel very confident in their level of knowledge of investment
products and how to invest which
points to a real need for support in this area from providers.
The information contained in Prudential UK's press releases is intended solely for
journalists and should not be used by consumers to make financial decisions. Full
consumer product information can be found at www.pru.co.uk
- ENDS -
Notes to Editors:
* Survey conducted by George Street Research in December 2009 among a representative
sample of IFAs in England and Scotland
"Prudential" is a trading name of The Prudential Assurance Company Limited, which
is registered in England and Wales. This name is also used by other companies within
the Prudential Group, which between them provide a range of financial products
including life assurance, company pensions and
products for savings and investments.
Registered Office at Laurence Pountney Hill, London EC4R 0HH. Registered number
15454. Authorised and regulated by the Financial Services Authority.
3 Sheldon Square
020 7150 2657