Advisers know what they need in uncertain times

Financial advisers are better equipped to handle the current crisis than ever before, asking investment managers should they buy rather than should they sell.

“This is not their first rodeo, advisers and clients seem reasonably well conditioned to date,” said Tom Glynn, Head of Wholesale Distribution, DNR Capital. “However, their questions do reflect the speed of the fall, with limited opportunity to adjust their portfolios in anticipation.”

Advisers are looking for quick access to explanations on performance, activity and portfolio positioning.

Practical examples of what is happening in investment portfolios along with up-to-date information on where portfolios are winning and losing is what advisers have been asking for over the past two weeks.

“Advisers have  full transparency in a managed account environment, they see the daily volatility of individual assets, but can overlook the diversification benefits of the overall model and the ability for the manager to execute rapidly ,” said Glynn.

“We are speaking with advisers about how our strategies are positioned, where the opportunities lie and practical ways to communicate with their clients in a more challenging environment”

Pendal Groups Country Head Wholesale Distribution Tim North Ash agreed: “Advisers are looking for clear and calm insights, cutting out the noise and helping them to keep their clients on track and on their long term plans.”

He says up-to-date information about positioning of funds across asset classes is also important, including everything from decisions on security selection, asset allocation, duration and outlook.

Perennial’s Small Companies Responsible portfolios said advisers are focussed on reducing volatility.

“Advisers are increasingly concerned about the volatility of their portfolios, and research has shown that sustainable funds may exhibit lower volatility of returns,” said Emilie O’Neill, ESG and Equities Analyst, Perennial Value Management.

“We do not believe that there is a trade off in investing in a sustainable way and returns. In fact, we are discussing with advisers that investing in companies that have a focus on sustainability can deliver solid portfolio returns.”

Perennial has also noticed a change in advisers behaviour, particularly relating to their offer which is experiencing a renewed interest. “Advisers are more engaged on sustainability and ESG. Advisers are asking us more questions to deepen their understanding on ESG issues given the rise in interest from their own clients.”