Independent financial advisors are most willing to outsource asset allocation of their clients’ investment functions, a survey by FE Research has found.

The UK-based provider of investment data, software and performance analysis to the financial services industry quizzed 221 advisors during April and May.

Some 36 per cent said they were looking for a third-party solution, with the majority, 62 per cent, citing compliance and risk as their principal reason for this, followed by 61 per cent stating the need for external expertise.

For 52 per cent of advisors, the need for additional resources was their reason for outsourcing investment-related services, while only 22 per cent attributed the RDR as their deciding factor.

However, very few advisors, some 16 per cent, plan to outsource stock selection and 14 per cent to outsource trading and implementation, the survey found.

Client communications was one area where financial advisors were determined to keep control, with 84 per cent saying they wanted to handle client reporting and communications themselves.

In terms of other services advisors considered key to their proposition, some 82 per cent wanted to control portfolio monitoring, 76 per cent to conduct attitude to risk questionnaires and 71 per cent to manage fund selection.

“This survey demonstrates that the relationship between advisors and their clients remains paramount. Providers of outsourced solutions, such as model portfolios, need to acknowledge that IFAs want to remain in the driving seat and to maintain direct contact with their clients. This is as it should be, as IFAs know their clients far better than third-party fund managers, and have a deeper understanding of their financial goals and capacity for risk,” said Rob Gleeson, head of research at FE.

Of the financial advisors participating, 33 per cent had £100 million ($151 million) or more in assets under advisement, 16 per cent advised on £50 to £100 million, while the remaining 51 per cent had less than £50 million.