IFAs favour passive funds

Research from Legal & General Investments (L&GI) shows that advisers are viewing passive investments far more favourably this year than last.

When asked which asset classes they would be investing into over the next 12 months, nearly two in five IFAs surveyed indicated they would be buying passive funds, an increase of 7% on 2011, when only three in 10 had passive investments in their sights.

The findings come from L&GI’s annual What Matters Investment Index which aims to investigate the views of the IFA community, tracking how sentiment and behaviour changes over time.

Commenting, L&GI managing director, Simon Ellis, says: “In anticipation of RDR, and from talking to advisers in the marketplace, we believe passive investments will occupy an increasingly prominent position in the market and this research provides further evidence of this view.”

While there has been an increase in the number of IFAs taking up passive investments on behalf of their clients, the study also shows little change in the number of advisers likely to invest in active funds over the coming 12 months, with the proportion remaining steady at 80%.

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