Advisers pick active management as top key for outperformance

Yasmine Raso

Senior Journalist

21 August 2024

New research from platform provider, Praemium, and CoreData has revealed active management as the top strategy selected by financial advisers to generate outperformance.

The survey of financial advisers found active stock selection and partnering with asset managers rounded out the top three strategies to stay on top of inflationary conditions, interest rates and ongoing market volatility. Alternatives also captured 21 per cent of the vote, with high-net-worth advisers the most likely to use the asset class to generate alpha.

“With the complexities of today’s financial markets, there’s a tremendous opportunity for platforms, asset consultants, and licensees to work together to provide the crucial support advisers need to generate alpha,” Praemium’s Chief Strategy Officer, Denis Orrock, said.

“Praemium has an extensive investment menu and the most alternative assets of any platform providing advisers access to a wealth of investment opportunities. We also provide a comprehensive suite of tools that enhance decision-making and investment strategies.”

The research also indicated that 40 per cent of advisers believe access to a large suite of investment options was “critical”, with infrastructure, private equity and private debt listed as the “assets of choice” for advisers seek to deliver above-the-benchmark returns and portfolio diversification.

Advisers also said the help received from platforms and licensees is “critical” to generate alpha and deliver top outcomes for clients.

Orrock highlighted the solutions provided by platforms, including scenario modelling, benchmarking tools and performance analysis, while licensees provide the research, tools and educational resources for advisers to inform their decisions for clients.

“Our research demonstrates that in a landscape where informed, agile decision-making is key to success, choosing the right partners is more vital than ever,” he said.