InvestmentsFeb 9 2023

How Arbuthnot Latham plans to 'disrupt' the DFM market

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How Arbuthnot Latham plans to 'disrupt' the DFM market
Arbuthnot Latham are hoping innovation will be key to them growing in the DFM market
ByDavid Thorpe

Arbuthnot Latham, the listed private bank which traces its origins back to 1833, is pushing into the adviser discretionary fund management market and aims to achieve “material” levels of inflows within three years.

Speaking to FTAdviser the company's chief investment officer Eren Osman said the firm plans to “disrupt” the incumbents by being “very competitive” on price and also through service levels.

An advised client coming to the firm directly, ie, not via one of the four platforms on which the company’s model portfolios are listed, will pay 0.55 per cent. 

Both the Global MPS and Sustainable MPS are available through the following platforms: Quilter, Fidelity, Aviva and Transact.

The DFM service is available for clients looking to invest at least £500,000.

Osman said: “I think performance and fees are hygiene issues for investment managers right now, we have the performance in the sense that we have worked with private clients for many years, and I think our pricing is competitive.

"But the other thing we have heard from recently acquired clients is that they sometimes feel that service levels are not always great at the larger DFMs.

"The central reason they give for this is they feel they don’t have a consistent point of contact at those firms, and I hope we can remedy that. We want to be quite disruptive.”

Osman told FTAdviser about how the firm wants to build its adviser client base.

“Only one per cent of our discretionary investment management book right now is done through advisers, and to be honest that one per cent really came about by accident where we would be working directly with a client but they would subsequently have an adviser as a result of their circumstances changing," Osman explained.

"We had a long record of working with advisers in the lending side of the bank, but now we are on four of the adviser platforms.

"We are a business with a lot of entrepreneurial spirit, and we want to get to a point in three or four years where the inflows from the adviser channel are greater than the flows from our private client business.”

The company is already looking to expand its investment team.

The firm is currently recruiting four new investment managers, which would take the size of that team to 15, while on the research side the team will be eight strong. 

Osman said: “All of our risk weighted portfolios outperformed relative to their peer groups last year and the portfolios we use for advised clients will not be watered down versions of what we use for private clients, they will be the same.”