Trends among investment advisors mirror developments in P2P lending


New research reveals a shift towards prioritising more consistent outcomes for investors.


Recent attempts to simplify the process of investing in P2P loans have been met with some disenchantment; yet they seem to mirror trends in the wider investment management space.


New research from Equifax Touchstone, an intermediary database provider, illustrates an enhanced focus among investment advisors on delivering consistent investment outcomes to customers.


Of 141 surveyed investment advisors, 82 per cent were found to have a centralised investment process, meaning that a consistent approach to allocation and monitoring exists for all clients.


However, 76 per cent use model portfolios, which are bespoke to a customer’s risk-reward preferences, and which are automatically rebalanced regularly to bring returns in line with expectation – even if the broader approach to investment management is the same for all clients. These model portfolios are comprised of a diversified pool of mutual funds that invest in a variety of assets, ranging from large and small stocks to REITs.  


“Centralised processes and the use of model portfolios ensure that a client’s attitude to risk is reflected and maintained on an ongoing basis, as these portfolios are managed according to strict risk criteria, and re-balanced regularly,” said John Driscoll, director at Equifax Touchstone.


“We’re witnessing a shift to a more structured investment process, with centralised processes a key foundation for investment advice. This approach helps strike the right balance between risk and return, particularly important in a world of increased market volatility.”


Driscoll went on to explain that the FCA is driving this shift, and that it is increasingly important for advisors to demonstrate that risk is “managed, monitored and maintained” to a level that is…

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