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Professional retail fund selectors are increasingly favouring active strategies against a volatile market backdrop, as advisers look for ways to help retired clients manage inflation, drawdowns and cash flow needs.
Respondents to a survey commissioned by Rathbones, one of the UK’s leading wealth and asset management groups, identify trust and longevity as the most important qualities in an active manager. Risk management, return potential and downside protection were also mentioned as other key priorities.
The study found that 95% of IFAs, DFMs and private bank fund allocators say market turbulence makes active management easier to explain to clients.
Drawdown management is another key priority for clients with cash flow requirements, particularly those in retirement. More than nine in ten respondents (93%) describe this as very important, including 30% who view it as critical.
Absolute return is the preferred approach for 52% of respondents, compared with 43% who favour relative return. A further 5% say they assess managers’ strategies case by case.
Tom Carroll, CEO, 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. For retired clients, that support can be especially valuable, where drawdown management and long-term confidence matter alongside returns.”
Active managers’ commentary and market insight are also seen as a useful tool for supporting client conversations. Some 97% of respondents say these contributions can support constructive investor behaviour during volatile markets.
Respondents say this support can help clients remain focused on long-term objectives and avoid reactive decisions. Almost a third (29%) describe the value of this contribution as high, while 68% rate it as moderate.
Carroll added: “The research shows that active managers can support advisers beyond portfolio selection. Timely insight gives advisers another way to help clients look through short-term market noise and stay focused on their long-term objectives.”
The findings point to a broader role for active managers in helping advisers navigate uncertainty and support client conversations. With volatility and retirement income pressures still high on the agenda, trust, risk management and clear communication remain central to the active management proposition.
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