Defaqto research has revealed that advisers think the quality of the staff working at discretionary fund management firms is the most important aspect of the investment service.
The research provider asked 15,000 advisers to rate DFMs on the importance of 14 categories, with the quality of staff at the DFM ranked the most important aspect of service.
According to Defaqto, advisers want to be able to rely on personal contacts to help with any issues, indicating that that the industry is very much based on relationships and professional interaction.
This comes despite huge developments in technology changing the service provided by DFMs.
The research found that two discretionary management firms fell short of the top three most important expectations, which include the quality of the client-facing service and the ease of doing business.
Satisfaction category | Importance ranking
| Adviser satisfaction experience |
Quality of staff – investment | 1 | Borderline |
Service (client side with DFM) | 2 | Falls short |
Ease of doing business | 3 | Falls short |
Investment flexibility – range of options | 4 | Exceeds |
Quality of staff – administration | 5 | Falls short |
Existing business administration | 6 | Exceeds |
Investment flexibility – range of assets | 7 | Falls short |
Provider financial strength and resource | 8 | Borderline |
Client on-boarding | 9 | Exceeds |
Online facilities | 10 | Falls short |
Quality of literature | 11 | Borderline |
Remuneration | 12 | Borderline |
Accessibility | 13 | Borderline |
Provider brand | 14 | Exceeds |
Defaqto said it was unsurprising that the service to the client was ranked second in importance, because a good service from the DFM potentially improves the client’s relationship with the adviser, who has recommended the service.
Pan Andreas, head of insight and consulting for DFM at Defaqto, said: “Advisers may understand and forgive any rare lapse in service, but clients may not be so accommodating.”
This was similar for the ease of doing business, because a problem-free relationship can help boost an adviser’s investment offering, which will ultimately have a positive knock-on effect on the client.
Mr Andreas said the combination of a financial planning expert and a specialist investment manager can provide a great deal of value to a client.
“However, if the value of the DFM falls short in the eyes of the adviser there are alternatives,” he said, pointing to other alternative solutions, such as advisory portfolio management, multi-manager or multi-asset funds.
katherine.denham@ft.com
