The study found that 28 per cent of advisors now outsource discretionary management, with three quarters (74 per cent) doing so because of knowledge constraints and 14 per cent saying their decision was driven by increasing pressures on their time.

Looking at knowledge constraints, Close found that advisors opted for outsourcing in acknowledgement that clients’ investment portfolios might be more efficiently managed by larger asset managers with their more detailed analytical knowledge.

The firm, along with many others in the industry, predicts that this trend towards outsourcing will only continue going forwards due to the regulator’s Retail Distribution Review reform package. Increased regulatory red tape and new mandatory qualification requirements coming in at the start of 2013 will force some advisors to outsource discretionary management, but it is not all about negative drivers, Close notes.

Respondents to the survey cited the benefits of active fund management on a daily basis and some even said that their clients prefer the outsourcing model, no doubt because it means advisors can spend more time with them and focus on their financial planning needs.

“Managing client portfolios requires a specific investment skill set as well as the advisor’s time and it is not surprising that there is a growing demand for outsourced discretionary management,” said David Muncaster, director of intermediary sales at Close.

Close is itself a prominent player in the discretionary outsourcing arena and has busily been gathering assets from a number of regional IFAs in recent times.