UK independent financial advisers (IFAs) are herding around the best-selling funds, research shows.
Fifty-five per cent of IFAs – or three times as many as last year (17%) - are being drawn to funds with the strongest sales figures. This is seen as an attempt by advisers to seek ‘safety in numbers’.
The findings come from Legal & General Investments’ second annual What Matters Investment Index which aims to investigate the views of the IFA community and track how sentiment and behaviour changes over time.
Simon Ellis, managing director, Legal & General Investments, said: “The increase in ‘sales momentum’ as an important factor is somewhat disconcerting. It could suggest that portfolio modelling is becoming more homogenous, or that fashions are influencing how funds are recommended.
“What is clear from the survey and industry stats is that at a time of significant market volatility, strong brands and heritage are helping IFAs in navigating murky economic waters on behalf of their clients.”
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