Aegon Adviser Attitudes Report 2021

MIFID II and the multi-asset revolution The biggest change is the use of multi-asset funds. 22% say they’ve increased their use of multi-asset funds, and they now make up 33% of adviser assets under management (up from 26.0% in 2019). In addition, 7% said that the increased disclosure requirements of MIFID II had made them consider using fewer in-house model portfolios, which has clearly boosted the popularity of multi-asset funds. These funds tend to have clearly defined target markets which help with meeting PROD requirements, and they have in-built governance and reporting processes in line with MIFID II requirements. As such they’re proving to be a straightforward and cost-effective way of demonstrating both client suitability and reporting transparency. We expect this trend to grow as advisers weigh up the cost and complexity of providing their own models against the benefits of choosing an off-the-shelf multi-asset solution. Move to lower-cost solutions 18% have increased their overall use of lower-cost solutions as a result of MIFID II and PROD legislation while 11% have reduced the overall use of higher cost solutions. This is perhaps unsurprising given the requirement to disclose ex-ante and post-ante costs, making higher ongoing charges figures (OCFs) more visible to clients. A further 14% of advisers said that MIFID II and PROD had increased the cost of managing certain investment strategies. These results are perhaps due to the regulator's enhanced scrutiny of value for money in fund recommendations. 18% have increased use of lower-cost solutions as a result of MIFID II and PROD 22% have increased use of multi-asset funds Aegon adviser attitudes report 2021 19