Market turbulence is strengthening the case for active management among professional fund selectors, as advisers look for ways to help clients navigate volatility and generate retirement income.
Research commissioned by Rathbones reported that 95% of 100 surveyed UK IFAs, discretionary fund managers, private bankers and fund selectors believe unsettled markets make active management easier to explain to clients.
In addition, 97% said active managers’ market insights can help investors avoid impulsive decisions during periods of uncertainty.
When assessing active managers, respondents ranked trust and longevity as the most valued attributes, while risk management, return potential and downside protection also featured prominently among advisers’ priorities.
Tom Carroll, chief executive officer at Rathbones Asset Management, said: “Periods of market stress can sharpen the case for active management.
“Advisers are looking for managers who can combine judgement, risk discipline and clear communication, particularly when clients are under pressure to make short-term decisions.”
The research also noted that active managers’ market commentary and investment insights are increasingly being used to support conversations with clients during volatile periods, helping investors remain focused on long-term objectives rather than reacting to short-term market moves.
For clients with cashflow requirements – particularly those in retirement – drawdown management is another key requirement. The majority (93%) of respondents described this as ‘very important’, with 30% arguing it is ‘critical’.
“The research shows that active managers can support advisers beyond portfolio selection,” Caroll said.
“Timely insight gives advisers another way to help clients look through short-term marker noise and stay focused on their long-term objectives.”