But while stepping back from investment even just for a portion of the client bank can make life easier in some respects and enable a focus on planning, the adviser retains the relationship with clients and there are specific and ongoing due diligence requirements.

It is important that the adviser identifies the specific nature of a discretionary investment management service and a panel of fund managers, as well as how they continue to meet the needs for any and all clients using the service.

At the most basic level, a DFM is a manager of assets who has the authority to buy and sell investments under their management, without referral to the beneficial owner of those assets.

In reality however, the discretion given to an investment manager is constrained by the investment mandate of the portfolio and the financial objectives of the client. These boundaries are established to ensure that the discretion used maintains suitability to the client.

This guide will explain the different types of discretionary fund management service available, individuals a DFM could be suitable for, and how to make sure you reach the right agreement with a DFM for you and your clients.

Supporting material was provided by: Mark Stevens, head of intermediary services at Investec Wealth & Investment; Emma Wall, editor of Morningstar.co.uk; Mark Rockliffe, head of intermediary sales at Heartwood Investment Management; Eric Clapton, chief executive of Wellian Investment Solutions; and Gareth Johnson, head of managed investment services at Brewin Dolphin.