Advisers have been increasingly using outsourced investment solutions for their clients over the past decade.
Whether they are choosing the services of a discretionary fund manager (DFM) or using multi-asset solutions, more financial advisers are considering handing over the daily job of managing money to professional investors, so the adviser firm can focus on the client relationship.
But what sort of challenges and opportunities does outsourcing investment decisions really bring? With the Financial Conduct Authority keen to make sure that suitability and risk-appropriate investments are kept to the forefront, what sort of decisions do advisers need to make about the manner in which they outsource, the operational framework they agree to and the arrangement they enter into with the discretionary fund manager?
This article, which qualifies for an indicative 30 minutes' worth of CPD, aims to explore the pros and cons of outsourcing and explain how advisers choosing to outsource need to negotiate better with DFMs and communicate more clearly with the client.
Contributors of content towards this guide: David Gurr, director for Diminimis; Barry Neilson, chief customer officer for Nucleus; Lawrence Cook, director of marketing and business development at Thesis Asset Management; Gary Kershaw, spokesman for SimplyBiz; Andrew Denham-Davies, business development director at Brooks Macdonald; the Personal Finance Society's Good Practice Guide on research and due diligence for advisers using DFMs.
Simoney Kyriakou is content plus editor for FTAdviser