Assetfirst calls for DFM costs to be monitored

Who is paying for DFM services in a post-RDR world is something that needs to be monitored, according to Philip Bailey, director of the model portfolio service.

Speaking at a Financial Adviser seminar on DFM today (21 September), Mr Bailey said that over the years DFM has become less bespoke.

Mr Bailey said: “I remember 10, 15 years ago that DFM was a bespoke service offered to high net worth clients. It is interesting that over the years it has become less bespoke, individual DFMs have had less control of their individual clients, there has been more centralised investment process work, which is commendable, as it is making things more controlled, uniform and repeatable.”

But Mr Bailey said that potentially the “victim” of these changes will be the client.

He continued: “It is quite right that these solutions are all available for IFAs, they need them now with RDR rapidly approaching, but we have to look at who is paying for these services. If the costs are just being passed onto the clients then it is not the ultimate solution that perhaps was the intention of RDR.”

Mr Bailey said that although DFMs are a “great” service, he questioned how they fit for smaller clients with the models that are being run.

Also on the panel were, Bruce Ely-Johnston, head of adviser solutions at London & Capital, Rob Burgeman, member of the London executive team of Brewin Dolphin, and Dominic Ventham, head of marketing at Ascentric.

Read more in forthcoming issues of Financial Adviser.