Adviser Guides 1hr
Guide to outsourcing fund management – part 1
To make sure outsourced fund management works for both the adviser and their clients, research and carefully worded agreements are vital.
The first part of this two-part guide explores the different ways to outsource fund management, the pros and cons of handing over your client to a third party plus the FSA’s requirements for such arrangements.
Answers supplied by David Lumley, director of Arena Wealth, Mark Soonaye, product director of Octopus Investments, and Carl Lamb, managing director of Almary Green.
IN THIS GUIDE
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Q: What is outsourcing?
Outsourcing means passing over some (or all) of the adviser’s work regarding the research, selection, review and management of a client’s...
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Q: What are the different outsourcing options?
Outsourced fund management comes in two main flavours: full fat discretionary fund management and multi-manager solutions.
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Q: What are the pros of outsourcing?
Discretionary fund managers may have more expertise in managing investments than an adviser.
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Q: What are the cons of outsourcing?
There are, inevitably, cost implications for the client with fees charged by discretionary fund managers for their services.
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Q: What are the FSA’s requirements for outsourcing?
The FSA requires IFAs to have the client’s interest at the heart of their advice process.
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Q: What is a discretionary fund manager?
A discretionary fund manager is a professional third party manager working to set parameters in terms of portfolio choices (risk profile, client...
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Q: How do I assess if a DFM is right for my clients?
Choosing the right DFM for your clients will involve an extensive campaign of meeting and researching potential candidates.
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Q: How do I narrow my search for a DFM?
Finding a suitable DFM is a hugely important task for the IFA and one that has no shortcuts.
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Q: What questions should I ask a DFM?
It is important to ask what experience they have and what investment cycles they have worked through.
