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Justin Onuekwusi: Why I quit Aviva to join L&G
by Robert St George on Sep 17, 2013 at 10:08
Speaking exclusively to Wealth Manager, Onuekwusi said: ‘Multi-asset has changed significantly over the past few years,’ and he framed his move in the context of those developments.
One, Onuekwusi explained, was a renewed emphasis on cost. In the multi-asset world, that entails constructing portfolios with passive ‘building blocks’.
When at Aviva, Onuekwusi had to rely on third parties, such as BlackRock for this exposure, but at L&G, he could not only access such funds more cheaply in-house but also be involved in their manufacture as he sits within the L&G solutions team. This, he remarked, was ‘a big incentive’ for coming to L&G.
As a recent example, Onuekwusi cited the creation of the Legal & General Global Inflation Linked Bond Index fund, for which he had provided seed financing.
A second attraction, continued Onuekwusi, was the ability of L&G to compete in the post-RDR marketplace. Essential to this was L&G’s relationship with Distribution Technology, the risk-profiling specialist, which enables advisers and wealth managers to ensure that his funds meet the ongoing-suitability test.
‘People who use Distribution Technology have definitely seen it as a strong advantage for L&G relative to the competitors,’ Onuekwusi observed. ‘These are solutions in a fund wrapper.’
Equally, Onuekwusi considered this a significant merit of risk-targeting multi-asset funds over absolute return funds. ‘You can either target risk or you can target return,’ he argued. When a specific return was targeted, the risk would be unquantifiable. ‘If risk is variable, you can’t tick the box of ongoing suitability,’ he added.
Onuekwusi therefore said that large allocations to absolute return strategies would no longer be viable. ‘In the post-RDR world,’ he stated, ‘I don’t see how that can be the case going forwards.’
A final strand to L&G’s appeal, Onuekwusi added, was its heritage as both an expert in passive funds and as a brand. ‘Being seen as a safe pair of hands is very important,’ he relayed, ‘and being a household name does make a difference.’
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