Headlines:
- Regulatory issues stopping innovation
- Decumulation market lacking in innovation
- Smoothing funds still have a place in the market
- Concern that following the same of similar risk tools drives everyone to making the same decisions – herd approach
Key Challenges:
- Having the right conversations with clients about income rather than just capital
- Changing the perception of multi asset finds in as much as a client just sees one fund and may feel they are not getting value compared to say a DFM
- Clarity around some key regulatory aspects that is holding back certain types of funds/strategies that could be used in the UK. In the States Target dates funds are used and could have a place in the UK but work needs to be done to establish how these could be done on an individual basis
- Keeping the costs down in an investment solution
Conclusion:
- Multi asset funds have a space in the UK market but they need to change how they are reported to clients to give the feel of greater ongoing value
- The decumulation market desperately needs innovation as the strategies used in it are more akin to accumulation
- Regulation needs to be clearer and more flexible to allow innovation in the decumulation market.
Expert: Nick Samouilhan, T Rowe Price
