Says Mr Willis: "RDR also had an effect because this examined the role of the adviser, the service they provide and the justification of the fees and charges they levied.
"RDR meant many advisers who had been running client investment portfolios were now not deemed qualified enough to do so. It also highlighted to the advisory community that to justify their fees, they had to provide holistic financial advice.
"Plus, the requirements to continue to run client investment portfolios (research, trading etc) to service their clients properly meant outsourcing the actual investment management to qualified investment professionals."
Jonathan Miller, director, manager research ratings, UK, for Morningstar, comments: "As pension rules changed, RDR came in and investors looked for diversified income solutions given low interest rates, multi-asset funds have risen in popularity. This has meant the more expensive fund of funds no longer being a preferred one-stop solution."
James Dowey, chief economist and chief investment officer for Neptune Investment Management, agrees multi-asset funds have become more popular over the past few years "largely owing to regulatory changes and the trend towards financial advisers outsourcing investment".
However, he believes while there has been a proliferation of these products, he feels there is still a "big gap in the market" for multi-asset funds which do the job well while remaining easily understandable to clients.
Risk-adjusted returns
With investors increasingly concerned about the inter-connected world in which we live and the prospect of global volatility having a great effect on investment returns, it is no wonder investors are having to diversify away from the traditional asset classes in order to generate the levels of income they require.
This is the view of Jonathan Webster-Smith, head of the multi-asset team at Brooks Macdonald, who says: "The valuations of many assets are at historically high levels and the correlation between traditional assets such as equities and bonds has increased.
"As such, it has become more important and harder for investors to reduce risk in their portfolios through diversification."
He believes multi-asset products and managed portfolio service (MPS) strategies can help investors access a wider range of asset classes more efficiently, allowing them to boost their chances of "generating attractive risk-adjusted returns".
Mr Miller adds: "There’s also been a move towards remits-based investing around outcomes, which show a target to investors. However, our analysis suggests that these solutions differ little from the more traditional balanced funds when it comes to their risk adjusted return profile, plus they haven’t been tested in a downturn.”
