A poll of advisers by Investec Wealth found this figure had increased 6 percentage points since 2012, before the RDR came into force, when the number stood at 48 per cent.
The poll also revealed that, under their existing DFM relationships, 97 per cent of advisers insisted on remaining responsible for assessing the overall suitability for each client based on their tolerance to risk and capacity for loss,
A further 66 per cent of IFAs reported that they took overall responsibility for agreeing the client’s investment strategy, suggesting that in most cases a DFM’s mandate may cover only part of their overall portfolio.
Mark Stevens, head of intermediary services for Investec Wealth & Investment, said: “This study clearly shows that the needs of advisers and their clients are far from homogenous and DFMs have to adopt a flexible approach if they are to develop successful partnerships. This echoes our own experience of working with IFAs over many years.”
He added that DFMs which tended to take a one-size-fits-all approach to working with advisers ignored the often complex and varied requirements of their clients, which was “only properly exposed through providing suitability advice”.
The survey came a few days after a roundtable on DFMs, held in the City, where advisers and providers discussed the relative merits and demerits of outsourcing.
Tony Bray, head of client relationships at support services firm threesixty, warned that advisory firms could fall foul of the City regulator by failing to scrutinise the underlying assets in discretionary fund managers’ portfolios.
It is not enough to outsource the risk; one must also take responsibility over where clients’ money is ultimately being invested.
Mr Bray also said advisers were often unaware that their DFMs were investing in unregulated collective investment schemes as defined by the FCA, which banned their promotion to all but the most sophisticated and high net worth investors at the start of 2014.
