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Tatton tops Defaqto DFM satisfaction study

Brooks Macdonald and Waverton Investment Management also performed well

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Tatton Investment Management was the most recommended DFM for advisers, followed by Brooks Macdonald and Waverton Investment Management, according to Defaqto’s annual DFM satisfaction survey.

Alongside being the most recommended provider overall, Tatton also topped Defaqto’s list of preferred providers for Managed Portfolio Services (MPS) via a platform and for MPS direct custody, based on the greatest number of top three preference positions.

Meanwhile Rathbone Investment Management took first place as advisers’ preferred provider for a bespoke DFM, based on the survey conducted among 247 advisers in August and September 2023.

This year’s study revealed the average DFM portfolio size for all three discretionary types continues to rise, with the average size for MPS through a platform being £284,000, MPS direct being £277,000, and bespoke DFM’s averaging £627,000.

According to the survey, over two-thirds of advisers access an MPS via an adviser platform, just over half use MPS direct and just less than half utilise the bespoke service.

See also: UK model portfolio sales outstrip overall fund sales

The study also measured how satisfied advisers have been with their preferred providers and identified where expectations are being met by cross-matching ranked importance with ranked satisfaction over 14 categories.

Service was the category ranked most important for advisers, switching places with Qualify of Staff – Investment, which ranked first in last year’s study.

“While many categories received similar satisfaction scores to last year, the worst performing categories were Online Facilities, Provider Brand, Quality of Literature, and Remuneration, which saw an average drop in satisfaction scores of two percentage points,” said Fraser Donaldson, investment consultant at Defaqto.

See also: Fundsmith Equity and Lindsell Train portfolio dropped from Evelyn Partners’ Best Funds list

Quality of Literature showed the biggest fall in satisfaction among advisers, which isn’t surprising considering the introduction of The Consumer Duty Regulation and the need for clear and transparent communication,” he added.

“Broadly speaking, fewer than a third of advisers felt fully supported by their preferred DFM during this transition and the quality of literature is likely to be a contributing factor.

“The FCA is focusing heavily on this regulation and, if advisers feel that the support they are getting is not sufficient to comply with the Consumer Duty, then it is inevitable that they will start to look elsewhere if things do not improve.”

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