Advisers upping game on stock-picking

Investment research is becoming a higher priority for advisers as the new regulatory environment and rise of SMSF investors force a renewed focus on beating benchmarks, says research company Skaffold.

Speaking to ifa, Skaffold managing director Chris Batchelor says he has seen a growing interest in Skaffold – an investment research and management product – from advisers, indicating wider trends in the market.

“As advisers move towards a fee-for-service model and no longer can rely on commissions from sticking a client into a managed fund, they have to be more adept at direct investment and stock-picking in order to provide value to the client,” he said.

Batchelor added that the increasing number of self-managed superannuation fund (SMSF) members is also driving the renewed interest in stock-picking and investment performance.

“We’ve made big in-roads in the adviser market and a lot of that interest is coming from advisers that work with SMSF investors.”

Since the launch of the product in 2011, Skaffold has been conducting research of its customers and wider network, which is suggesting not only a renewed interest in stock-picking but in global stocks.

“A significant number – about 40 per cent – of the advisers using Skaffold are using the global option, and that reflects our broader option that a majority of investors want to gain exposure to global markets but simply haven’t had access to tools to enable them to do that,” Batchelor said.

“Our research also showed the two main reasons investors and their advisers have been hesitant to invest in global markets are lack of access to research and lack of knowledge.

“The message of diversification has been drummed into SMSF trustees and advisers again and again – but for those that want to diversify into international equities it can be quite difficult.

“By broadening your portfolio into global markets you can gain advantage markets that are in different cycles.”

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