Outsourcing trend ‘long way to run’

Has the much-hyped outsourcing of assets by life companies to specialist sub-advisers actually gone too far? No, says, James Bevan, chief investment officer of Abbey, responsible for the bank’s Scottish Mutual and Scottish Provident life offices.

He famously opened up all of the company’s £30bn (e44bn) in client assets to external influences last year, has not regretted it and believes Abbey’s new owner Banco Santander will continue the process. Addressing PWM’s audience of investment heads at the London Stock Exchange, he concluded: “The challenge is no longer ‘why did you outsource?’ but ‘why did you not outsource?’”

John Betteridge, head of investment at UK life stalwart, Prudential, took a contrasting view: “In certain parts of the industry the IFA community has an excessive concentration on seeing lots of different managers on platforms.”

This results in clients obsessed with choosing best-performing funds, he added. “The real focus for the customer or IFA should be on asset class selection, not manager selection.”