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.
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.