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19th July 2018
Wealth Manager

Why SRI is one area where new launches are encouraged

It seems a new fund is launched almost every day. A primary consideration for asset managers is demand, but how much input do wealth managers actually have in the process?

Getting wealth manager and adviser input on new products usually comes after the development process has already begun, says Brett Bayliss, investment director at JM Finn’s Bury St Edmunds office.

‘We don’t really visit fund houses with ideas for new products, it’s mainly the other way around,’ he says.

‘Usually products, when they reach us, are further along and the fund house is feeling its way to how much demand there is for the type of product they are creating.

‘Fund houses also do product roadshows for existing products and often discuss how we are using them and what we are looking for.’

Bayliss points out that often, fund managers will use such roadshows to incorporate features that wealth managers ask for. He specifically highlights Liontrust, which he says is very good at using these discussions to create new products.

Where new products are needed

Lester Petch, chief executive officer of TAM Asset Management agrees. Except in certain circumstances, he says that it is rare he will request a new product.

However, particularly on socially responsible investments (SRI), wealth firms do approach fund businesses.

‘On the SRI side, where the universe is narrower, we have had conversations about potential new products with some fund houses,’ he says.

‘These are mainly discussions about asset classes and styles we believe are lacking in the universe and relate to gaps I would like to fill within our portfolios.’ An example of a product launched as result of this process is the Edentree Short Dated Bond fund, which according to Petch, was the result of many discussions with TAM and others about the lack of short dated fixed income products in the SRI field.

Wealth managers and IFAs can also often influence the creation of new share classes adds Petch, such as income or accumulation, or different currency classes, but this tends to require sufficient demand from clients. 

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