Outsourcing by UK's IFAs set to rise

Outsourcing by UK's IFAs set to rise

UK independent financial advisers (IFAs) will outsource the management of a greater share of investment assets in the future, research from US-based firm Cerulli Associates suggests.

The research indicated that the IFAs surveyed outsourced 41.7 per cent on average of assets under administration this year, a rise from 41.4 per cent in 2015.

Cerulli Associates Europe's managing director, Barbara Wall, said IFAs expect that figure to climb to 45.9 per cent in 2017.

“Merger and acquisition activity in the financial advice and wealth management market increased exponentially,” Ms Wall said.

“It is now slowing, revealing an industry divided between large, multi-service adviser and wealth management companies and small, traditional, independent advisers.

“The smaller players are more likely to have to outsource investment allocation,” she said.


The survey also found that almost two thirds (64.4 per cent) of the IFAs surveyed outsourced to a discretionary fund manager, followed by multi-asset funds and multi-manage/funds of funds, each of which were used by 53.3 per cent of advisers.

More than one third of IFAs (35.6 per cent) outsourced to platforms’ model portfolios, with only 2.2 per cent using robo-advisers.

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