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Guide to Discretionary Fund Management

    CPD
    Approx.60min
    Guide to Discretionary Fund Management

    Introduction

    Increasingly discretionary fund managers, known as DFMs, also supply model portfolios through third-party platforms.

    For an adviser, one advantage of working with a DFM is the ability for the adviser to outsource their investment proposition to a third party manager who can modify their approach to the adviser’s broader proposition.

    However, recent FCA remarks about advisers not being able to offload responsibility for their clients to third parties and ongoing concerns about investors being poached, mean some advisers may be concerned about using DFMs.

    While the FCA has remained neutral on the merits of using discretionary fund management, the regulator has recently stressed how important it is that the client understands what are the respective responsibilities of the adviser and the DFM.

    This guide addresses those concerns, looks at what an adviser should consider when selecting a DFM and examines what part a DFM should play in an investor’s portfolio.

    Supporting material produced by: Mark Barrington, director of the managed funds service at Waverton; Nick Holmes, managing director of Brooks Macdonald Asset Management; Guy Stephens, managing director of Rowan Dartington Signature; Mark Rockliffe, head of intermediary sales at Heartwood Investment Management; Robin Beer, head of intermediaries division at Brewin Dolphin; and Gareth Johnson, head of managed investment services at Brewin Dolphin.

    In this guide

    CPD
    Approx.60min

    Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

    1. What does Mr Stephens say “there is no such thing as” when it comes to agreeing a discretionary mandate?

    2. From how much can people buy some form of DFM services in 2016?

    3. What can investors at or near retirement enjoy with a DFM, according to Mr Barrington?

    4. What is one of the disadvantages of using unitised multi-manager funds, according to Mr Stephens?

    5. What link has been coming under FCA scrutiny recently, according to Mr Stephens?

    6. Which of the following has not been recommended in Mr Johnson’s requirement checklist?

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