INVESTMENTS
AN ACTIVE CORE TO HELP YOUR CLIENTS SLEEP AT NIGHT
Mark Parry , Director , Head of Distribution Partners BMO Global Asset Management
The asset management world is a fast changing one . That
means themes , opportunities and asset classes moving into the spotlight and then out again . It means new approaches and perspectives gaining traction before either becoming accepted as mainstream or fading into the background once more . And it means personalities gaining prominence and followings from those that buy into the view that individual talent can sometimes be a guarantee of long-term investment success . Sometimes this may be the case but often stars fade , complex strategies fail to deliver on their promise , and ‘ must have ’ opportunities lose their sheen .
Familiarity can breed illiquidity We ’ ve seen several examples in recent years . High profile absolute return strategies have become mired in complexity and struggled to produce the sort of returns they were touted as capable of . Assets like property have left investors caught in a liquidity limbo and , similarly , thousands of people have seen their investments locked-up when an individual manager ’ s approach begins to struggle . We ’ re not dismissing sophisticated strategies , alternative assets or individual talent , but we ’ re keen to argue that whilst all these can play a role in a broader portfolio there can be issues if they hold a dominant position . Better in our view , is to maintain a non-complex core that offers scope to deliver on long-term investment objectives but structured to be resilient enough to weather challenges . This enables advisers to provide a suitable investment building block across a broad target market , taking account of the FCA ’ s Product Intervention and Product Governance Sourcebook ( PROD ) rules .
WITH THE RIGHT RESOURCE AND CAPABILITY IN PLACE , THERE ARE NUMEROUS WAYS VALUE CAN BE ADDED WITHOUT DEPLOYING OPAQUE TECHNIQUES AND COMPLEX INSTRUMENTS .
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