IFA use of DFMs to grow, but service quality key- Investec

A significant majority of advisers expect the demand for bespoke discretionary fund management services to rise in the next few years, but only those that offer high levels of service quality are likely to survive, research by Investec Wealth and Investment shows.

IFA use of DFMs to grow, but service quality key- Investec

|

According to a survey of 102 advisers in April 2015, while 71% said they expected demand for DFM services to remain the same or move higher in the next few years, 67% said quality of service was most important criterion when selecting a DFM to manage money on behalf of adviser clients and, importantly, 61% said they would end a contract with a DFM were service levels to fall.

Other factors that played a significant role in determining who to get to manage a client’s investments, were consistent investment performance, which 54% valued highly, value for money (51%), 42% cited cost transparency as important, while cost of management, at 42% rounded out the top five.

Mark Stevens, head of intermediary services at Investec Wealth & Investment, said, “Successful advisers know only too well the importance of providing a high quality service to their clients and it follows that they expect a similar focus on this area among their DFM partners.”

He added that, the high degree of overlap in the key factors cited by advisers when determining when to select a DFM and how they judge ongoing performance is encouraging because “it underlines the efficiency and transparency that characterises most successful partnerships.”

However, Investec noted, advisers were a lot less certain that the industry used the same criteria to select a DFM as they used to monitor ongoing performance, with only 39% saying they thought this was the case, while 35% said different factors were being used.

MORE ARTICLES ON