What advisers want in uncertain times

Investment managers report a jump in the level of support, guidance and communication advisers are looking to them to provide, a response to market uncertainty and changing economic forecasts.

“Advisers are looking for reassurance and clarity in the current environment,” says Francyne Mu, Analyst, Franklin Templeton Investments. “While we have had shocks before, there may be long lasting changes that may result from this one, such as supply chains.”

Coronavirus, oil prices, monetary policy and the looming US election are and will shape investment markets and economic performance over the coming 12 months.

Investment managers say given the level of noise in the marketplace around these issues, it is understandable that advisers are reaching out.

Innova Asset Management’s Managing Director and Co-Chief Investment Officer Dan Miles says there are two main questions adviser are asking – should investors hold off on investing and what should they do if investors are fully invested?

“The answers to these two questions are different for different customers but advisers are certainly looking for communication and guidance.”

In response, fInvestment managers are upping the frequency of their communication materials to keep advisers informed on any portfolio changes and reaffirming their investment strategy.

“With oil prices, some advisers are a bit more worried than others, and we are saying to them, ‘we’re not panicking, so you shouldn’t’,” says Mu. “We have good company names in the portfolio and are long term investors. It could actually be an opportunity to increase weightings.”

Russell Investments says it is an opportunity to communicate the strengths of the investment approach. “Advisers want better risk-adjusted returns,” Daniel Choo Portfolio Manager. “As the market cycle comes to a ten year point, it is harder to manage volatility, but this is why we have dynamic tilting in the portfolio to help manage this.”

The efficient management and implementation of client portfolios remains key for advisers says Lukasz de Pourbaix, Executive Director and CIO, Lonsec Investment Solutions, and managed portfolios continue to provide this.

“Lonsec’s managed portfolios provide advisers access to a range of actively managed portfolios underpinned by deep research and governed by an experience investment committee. Lonsec’s investment philosophy seeks to achieve portfolio outcomes in a risk-controlled manner.”

For InvestSense, building their investment philosophy to be valuation driven and delivering transparency and communication, has set them up well for the current market conditions.

“Post Royal Commission, it has been increasingly recognised by advisers that it is difficult  to demonstrate an edge in picking investment managers,” says Jonathon Ramsay, Director, InvestSense. “Advisers who are invested with us have replaced that with a broader focus on wealth management and we can help them better communicate what is going on in portfolios.”

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