JM Finn launches bespoke DFM service for advisers

The group launched TPS onto the Ascentric wrap platform, allowing advisers to outsource to a discretionary fund manager (DFM) while retaining control of client relationships.

Mike Mount, director of intermediary sales and head of JM Finn’s Cardiff office, said the group had decided not to launch risk-rated funds or model portfolios at this stage, and would focus on a more tailored service instead.

He said this was because the firm was concerned that a “disconnect” can tend to form between advisers and risk-rated portfolio providers over how a certain client’s risk tolerance should be assessed and treated.

The TPS service is likely to carry a higher minimum investment requirement than do risk-rated funds and model portfolios, as a result of the higher workload required in assessing each adviser firm’s methods of assessing risk individually.

“It’s not the most scalable or commercial solution, but it allows advisers to integrate a DFM into their proposition on their terms,” said Mr Mount.

“If an adviser has a particular investment philosophy, we are able to build and manage its portfolios accordingly; essentially by working through Ascentric a financial planning firm is able to integrate us into their overall proposition on their terms.

“Financial advisers have told us that they are interested in working with a discretionary fund manager (DFM) but they want to maintain control of the client relationship and custody of the client’s assets; by partnering with Ascentric we are able to meet these requirements.”

Mr Mount added that the firm was continuing to consider launching a range of risk-rated model portfolios, but it is currently more focused on working with a small number of adviser firm partners.

“It is possible that we will evolve and have [model portfolios] as a range as well”, he said.

He added that because JM Finn does not have a financial planning arm any conflicts of interest with partner firms can be avoided.

“Financial advisers can focus on their clients’ long-term financial plan and associated relationship, while we focus on delivering our specialism of discretionary portfolio management,” he said.

“We look forward to playing a part in the evolving relationship between financial planning firms and DFMs.”

He added that Ascentric was an ideal choice as the platform for the TPS service because it permitted the firm to build portfolios “in a cost effective manner”.