Q&A  

Diligence is key when appointing a DFM

• Notify clients of the arrangement, its limitations and implications. This may not be best suited to delivery within a standard client agreement where it does not apply to all clients. 

• Regularly check the financial strength of, and for any regulatory sanctions against, the DFM, as your client has no protection in the event of the DFM’s failure, and inform your professional indemnity insurance broker/underwriter of the service(s) you are providing.

The above is separate to the general due diligence you would be expected to carry out when arranging this type of investment strategy fora client. 

Richard Nuttall is director of compliance policy atThe SimplyBiz Group