Our recent Fund Distribution report focussing on discretionary fund managers (DFMs) explores how the DFM industry has evolved and how this evolution has impacted the products themselves. We also look at the process of asset allocation by DFMs and how they work with financial advisers.
The report contains the following sections:
- Overview of the DFM market: an in-depth look at the transformation of the market over the last few years, this section includes details on the following providers’ DFM propositions: Brewin Dolphin, Brooks Macdonald, Charles Stanley, Cheviot Asset Management, Close Brothers, Investec Wealth, Jupiter Asset Management, Morningstar OBSR, Octopus Investments, Old Mutual Wealth, Parmenion, Quilter Cheviot, Rathbone Investment Management, SEI, Seven Investment Management, Standard Life Wealth and Vestra Wealth.
- Major trends: platforms, DFMs and advisers all report increases in the use of outsourced investment solutions, we dig deeper into these trends and why they might have arisen.
- How DFMs and advisers work together: analysis of the criteria advisers use when selecting a DFM.
A few findings from the report:
- A growing number of DFMs and advisers are using platforms, advisers want these products on platform so they can maintain a close relationship with the client. The wrap platforms such as Novia, Ascentric and Nucleus are better able to handle DFM assets than the former fund supermarkets.
- The trend towards outsourcing – there are some indications that this trend is slowing or even reversing.
- We continue to see a move from bespoke fund picking to model portfolios, nearly half of adviser assets sit in model portfolios, either run in-house or out-sourced.
- There has been some innovation in the centralised retirement proposition space with a number of DFMs creating propositions focussed on decumulation.
- Advisers tell us that charges, investment performance and client service are the most important factors when selecting a DFM.