Advisers crucial to future of investment trusts-JPMorgan

Over a third (35%) of investment company directors say advisers are fundamental to developing a larger retail shareholder base for investment trusts, suggests a survey by JPMorgan.

Around half also say advisers' lack of focus on investment trusts is the biggest hurdle to increasing investor uptake.

Issues such as commission and fee structures and discount issues followed with 29% and 17% respectively.

A huge 94% of respondents say greater mainstream retail distribution is critical to the future health of investment trusts.

David Barron, head of investment trusts at J.P. Morgan Asset Management, says: "The shift in focus to mainstream financial advisers and online channels, such as fund supermarkets, has demonstrated a changing attitude in the sector.

"The swing presents a challenge in terms of building demand for investment trusts by targeting a wider audience and ensuring investors can easily buy and sell them. As a result it is essential that investment trusts use as many tactics as possible to make them more accessible and appealing, including marketing, education and access to platforms."

Direct platforms will be another key channel according to 42% of directors while the introduction of the RDR in 2012 will also open up the sector.

Barron adds: "The developing landscape driven by technology and regulation refreshes the new opportunities for investment trusts.

"For example, the RDR has proposed including investment trusts in the universe of retail investment products that advisers must consider in order to call themselves independent. Such regulatory impacts have the potential to increase the education about investment trusts."