The value of DFM

Our infographic based on the key findings from our research report - The value of discretionary fund management, which aims to investigate the value or impact the outsourced model has had on adviser business. 

One of the main concerns among advisers prior to adopting a discretionary fund manager is how the new structure will be viewed by clients, and how their relationships with those clients could be affected.

It is money that makes the world go round, or so the saying goes, and the value of Discretionary Fund Management (DFM) report set out to discover exactly how adopting a discretionary fund manager could hit the pockets of advisers.

A report looking at the value of Discretionary Fund Management (DFM) has unveiled clear distinctions between two camps of advisers, the adopters and non-adopters of a third-party investment manager. Yet, one important question remains, how do the two camps compare when it comes to investment performance?

Lifting the burdensome task of managing client investments from an adviser’s shoulders has an undeniable effect on the structure and goals of their average working week, according to the Rathbones Value of Discretionary Fund Management (DFM) report.

Our research report - The value of DFM investigates the value or impact the outsourced model has had on advisers. 
 

Examining the finer details of the Rathbones Value of Discretionary Fund Management (DFM) report over the course of its two chapters has offered unrivalled insight into the real impact a third-party investment manager has on financial adviser businesses. 

The immediate impact of adopting a discretionary fund manager (DFM) on adviser businesses and clients is now clear to see as a result of the Value of DFM report, but what do we know about the effect over the long-term?

Among the main barriers to adopting a DFM cited by financial advisers it is the cost, the potential loss of control and the inability to justify their own fee to clients that crop up as the main issues.

Making the decision to enlist an external investment manager to manage client portfolios is, in all likelihood, a tough call for a financial adviser business - particularly if there are concerns that clients may react negatively to the change.

Comforting for financial advisers will likely be that of all the findings from the Rathbones’ value of DFM report discussed so far, data which reveals the positive impact a third-party investment manager has on client relationships.

Watch our video exploring our key findings into the effect on the adviser’s relationship with the client. The video outlines some of the key findings as we sought to understand the benefits of DFM to the relationship between the adviser and the client.

Our infographic based on the key findings from our research report - The value of discretionary fund management, which aims to investigate the value or impact the outsourced model has had on adviser business. 

If deciding to take on the services of a discretionary fund manager (DFM) is a big decision, then scouting out the most suitable firm to partner with is another kettle of fish altogether for many financial advisers.

The burden of regulation hangs heavily over the world of financial services, and with the introduction of yet another swathe of rules under MiFID II in January this year the demands on adviser time is only set to grow greater still.

One of the main barriers facing discretionary fund managers (DFMs) is the perception that too few offer the level of personalisation needed to warrant an extra layer of cost.

Our infographic based on the key findings from our research report - The value of discretionary fund management, which aims to investigate the value or impact the outsourced model has had on adviser business.

This video sets out the business case for advisers to consider using discretionary fund management to help enhance their client relationships.

The myths surrounding DFM are not particularly new. With the trend towards using third-party services showing no signs of slowing, clearly the industry needs to do more to clear up some of the misunderstandings around the impact a DFM has.