InvestmentsNov 3 2014

DFM tie-ups to facilitate adviser ‘agency’ deals

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Discretionary fund manager Tilney for Intermediaries has signed contracts to ‘risk map’ its model portfolios with Distribution Technology and FinaMetrica, as it seeks to facilitate new ‘agency model’ deals that put client suitability considerations back into the hands of introducing advisers.

Last month the firm launched the new agency arrangement that leaves more of the client relationship - and associated accountability and risk - in the hands of the adviser, who would handle all client suitability assessments and select an “appropriate solution”.

Under this model, Tilney would run portfolios to specific risk mandates and focus on investment management, custody and reporting. Its sits alongside the existing ‘introducer model’, where the firm is responsible for client relationship management and assessing suitability.

While the new model is lower risk for the DFM, it will be welcomed by some advisers who have historically been wary of signing over client control to third parties. It also accords with regulatory pronouncements that have indicated advisers cannot abdicate risk responsibilities.

Partnering with Distribution Technology and FinaMetrica will mean advisers using these systems with clients can correlate their clients risk ratings with Tilney’s investment mandates.

Miles Robinson, head of Tilney for Intermediaries, said: “Developing our presence with financial planners is a key priority for the business, so over the last couple of months we have had many conversations with the firms we work with and we have listened to their feedback.

“Advisers are fully aware of the need to have a robust approach to risk-profiling their clients and many of the firms we work with, and others we would like to work with, are either using Dynamic Planner or FinaMetrica’s risk profiling services so we are delighted to partner with these firms.”

Kevin Bull, director of asset management clients at Distribution Technology, explained that financial planners will now be able to invest in Tilney’s model portfolios, “confident in the knowledge that the portfolio selected will match the client’s risk profile and suitability requirements”.

peter.walker@ft.com, ashley.wassall@ft.com