Reputation and financial stability most important considerations for fund investors, poll finds

News - Funds

Written by Ray Clancy

Wednesday, 17 March 2010 09:19

The reputation of a fund manager and financial stability are more important to investors than cost and service, according to financial advisers.

Reputation and financial stability seem to have become the cornerstones of fund selection criteria due to the crisis and the ensuing market turbulence, the latest JP Morgan Asset Management adviser poll has found.

Perhaps unsurprisingly 54% of advisers felt that, other than fund performance, a fund manager’s reputation was the most important criteria in the overall fund selection process with close to a quarter choosing the financial stability of a product provider.

Just 16% of advisers said that cost was the most important factor, other than performance, in the fund selection process. Quality of service and a product provider’s brand came bottom of the list with 13% and 2% respectively.

The poll also found that behind fund manager reputation and financial stability come cost and quality of service.

‘Although performance will always be important, the fact that advisers are focused on longer term criteria is a positive move for the industry, as investors become increasingly attuned to the benefits of long-term equity investments. I'm not certain that financial stability would have been as much of a concern in the fund selection process a few years ago,’ said Jasper Berens, head of UK retail sales at JP Morgan Asset Management.

He pointed out that the company’s report issued last year on the financial well being of individuals in the UK showed that people at all income levels need to be made aware of the long term growth potential of equities in order to live and retire comfortably.

‘Doubts have certainly been raised over the last few years about the stability of many large financial institutions and advisers are absolutely right to take this into account as an important part of the fund selection process,’ he explained.

‘This, alongside reputable and experienced fund management skills, will go someway to reaffirm to investors that equity investments are an essential part of healthy financial planning,’ added Berens.