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Communication between parties is the most important aspect of working with a discretionary fund manager, according to speakers at the Defaqto discretionary fund manager conference today.
The conference, held at the Business Design Centre in London, was holding an afternoon session on building a successful DFM-adviser relationship.
Speakers were Matt Ward from Defaqto, Chris Macdonald from Brooks Macdonald Asset Management, Robert Reid from Syndaxi Chartered Financial Planners and Robert Jukes from Collins Stewart Asset Managment.
Mr Ward covered the main points that advisers should consider when choosing a DFM. He said advisers should segment their clients, decide which parts of the process they want to outsource, match the DFM to their service proposition and carry out due diligence on the providers. This should cover initial selection, ongoing monitoring, company level search and compare the features of like-for-like providers.
He also said Financial Planners should not underestimate the benefits of going to meet providers, using the analogy of football teams who send their scouts to meet players and those who buy a player based on a series of videos.
Mr Reid gave a presentation entitled 'Delegation, Discretion and Direction'. He said: "It's all about communication and relationships between the adviser, client and provider. You can never delegate the client relationship.
"Delegation [to a DFM] does not mean desertion. If set up properly it can work very well but you still have to remain very much involved in the process."
He also questioned what happened to orphan clients and said firms needed contingency plans to ensure the liasion job between parties was not neglected.
Mr Macdonald, speaking on 'Suitability of advice-the way forward' said while there were opportunities, clients should always keep working with their financial adviser.
He said: "I don't believe clients should work with a DFM unless there is a professional adviser involved.
"I believe unequivically that professional advisers are best placed to provide the initial and onging suitable advice. I believe unequivically the DFM firm is best placed to provide ongoing management of portfolios. This is a great opportunity for two parties within financial services working well for the benefit of the client."
