IMA consulted four IFAs on Managed sector name change

The Investment Management Association (IMA) consulted just four IFAs about the overhaul of its Managed sector model.

The IMA is changing the Managed sectors to fall into line with the Association of British Insurers (ABI) fund categories.

For example, the IMA's Cautious Managed sector will be renamed Mixed Investment 20-60% Shares.

Two employee benefit consultants and four independent financial advisers were interviewed for their views ahead of the change, the IMA said.

Three of the IFAs thought a simpler name than the one the IMA has decided upon would be more appropriate.

They argued it is their role to describe the funds and explain how they work, and felt longer names would disengage their clients.

Two IFAs preferred the current names - for example Cautious Managed -, arguing their simplicity and familiarity outweighed any possible confusion or misunderstanding.

They did not see any problems with the current names, and did not feel it would be worth changing them.

The third IFA acknowledged the current names might cause confusion among investors, but still felt a simple alternative would be best for his clients, as he would always be there to advise them.

The employee benefit consultants preferred the Mixed Investment x-y% Shares model the IMA has now adopted.

They felt the format communicated more information that customers needed to know about the sectors' investment approaches than the alternatives.

They were not overly concerned about the brevity of the names.

One IFA also took this position for the same reasons. He was also more explicit about the fact that this name makes it clear that the investment involves assets other than shares, and felt the current use of jargon confused customers.