New research* from Legal & General Investments, one of the UK's largest investment providers, reveals that IFAs choose funds based on the three ‘Fs': fund manager, fund cost and fund house.
A quarter of IFAs (27%) rated the name behind a fund as the most important thing when it comes to their own investments.
The findings come from Legal & General Investments' What Matters Investment Index which investigates IFAs' views of the market over the coming year.
When asked the factors that impact their decisions in making a new investment, IFAs chose the fund manager as the most important factor (27%) followed by fund fees and charges (23%) and an investment provider with which they felt comfortable (21%).
Encouragingly, with RDR around the corner, 45% of IFAs rated the level of commission paid as not important at all. Fewer than one in twenty (4%) IFAs selected the best selling asset class as very important.
Simon Ellis, Managing Director, Legal & General Investments, said: "Fund manager reputation has long carried weight in this industry, although it is perhaps slightly short sighted to overly rely on this factor. Naturally, ‘star' fund managers have earned this status through consistent strong performance, but staying with a manager out of blind loyalty is something to be avoided. It is far more sensible to review your investments and make an unemotional decision about your portfolio.
"IFAs' views on commissions shows that they are well and truly adapting their models ahead of 2013, and I am sure that this number will be even greater next year, if not 100%."
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