Five UK discretionary fund managers (DFMs) – Brewin Dolphin, Brooks Macdonald, Investec Wealth & Investment, Quilter Cheviot and Rathbones – have formed the DFM Alliance, offering financial advisers a platform for improving client outcomes through information, education and collaboration.
While the DFM market has grown substantially in recent years, the DFM Alliance believes there remains a need for greater clarity for advisers around the concept of outsourcing, its potential benefits to the both the adviser and the end client, and what constitutes best practice.
Through this partnership, the DFM Alliance is committed to educating advisers on the benefits of outsourcing investment management; providing a knowledge base for advisers to draw upon when undertaking DFM due diligence; working collaboratively with advisers to assist in improving business practices for the benefit of the end client; and debunking the myths around working with a DFM and what it means for advisory businesses.
The DFM Alliance, whose members have combined discretionary assets under management of over GBP130 billion, will run a range of initiatives to support these aims, the first of which will be a number of free structured CPD conferences in June 2017 in the north and south of England.
Lucie Gordon, senior business development manager at Brewin Dolphin says: “The burdens on IFAs are huge. We want to help IFAs carry these burdens through helping with their investment, regulatory and risk processes. Of course, outsourcing to a DFM may not be the right solution for everyone, but the formation of the DFM Alliance is testament to our commitment to making sure IFAs have the information they need to make this decision.”
Andrew Denham-Davis, director, business development at Brooks Macdonald, says: “Ten years ago the term DFM was virtually unknown. At this important stage in the growth of the DFM industry we propose to focus our combined experience and resources to address the myths of the industry and emphasise that DFMs complement the adviser’s role. Gaining recognition that working with us can improve the efficiency of the adviser business and customer outcome is absolutely crucial.”
Mark Stevens, head of intermediary services at Investec Wealth & Investment, says: “The formation of the DFM Alliance will help address the changing role of the adviser in recent years. Clients are looking for broader, holistic advice and are more amenable to the adviser outsourcing in order to gain access to a greater level of investment expertise. Managing investments is a full time job, particularly at a time when it is harder to make good returns with appropriate levels of risk.”
David Miller, investment director at Quilter Cheviot, says: “The DFM Alliance aims both to remove any perceived doubt or mistrust advisers may have that using a DFM may weaken their client relationships, and to give IFAs who wish to use a DFM the right tools to compare. We are all different and it’s important IFAs have a choice.”
James Goward, head of sales support at Rathbones, says: “There are many advisers who understand the benefits of working with a DFM, but others are reticent because of what they think it may mean for their client relationships or their businesses. DFMs are sometimes perceived as expensive, less than transparent and even predatory. It is therefore our aim to educate advisers about how outsourcing can add value and strengthen the outcome for the end client. Conversely, this remains a fluid space, and DFMs have just as much to learn about the changing needs of the advisory world.”