Two thirds of advisers felt DFM providers had adapted well to the pandemic, according to Defaqto’s annual service review of DFM providers.

The study, conducted by the fintech and data provider between July and October, measured how satisfied the advisers were with their preferred DFM providers across 14 categories and identified where expectations are being met by cross-matching ranked importance to ranked satisfaction.

For 2020, the two additional categories were added to measure how well advisers felt their DFM providers had adapted to the pandemic.

Following a slight drop in satisfaction in Defaqto’s 2019 survey, 2020 saw a slight improvement (1%) in overall satisfaction. The satisfaction level for 7 of the annually measured 14 categories measured has increased, for 3 it has remained at a similar level, and for the remaining 4 it has fallen.

However, expectations were not being met for 9 out of the 14 service categories, including the top two service categories as ranked in importance by advisers (quality of staff (investment), and investment flexibility (range of options).)

The ranked order of importance of the 14 categories measured by Defaqto remained largely unchanged from 2019. Quality of staff (investment), investment flexibility (range of options), service, and investment flexibility (range of assets) were ranked as the most important categories.

On average, advisers were using 2.7 providers for DFM services, a slight rise from 2.5 in 2019.

Pan Andreas, head of insight and consulting (funds and DFM) at Defaqto, said: “The shape of the market is very similar to last year, where there are a handful of dominant firms, but with a very long tail. Providers have responded well to the demands of the pandemic, and as they continue to acknowledge the importance of adviser relationships, they can further improve their standards across the board.”