According to a survey of 102 advisers in April 2015, while 71% said they expected demand for DFM services to remain the same or move higher in the next few years, 67% said quality of service was most important criterion when selecting a DFM to manage money on behalf of adviser clients and, importantly, 61% said they would end a contract with a DFM were service levels to fall.
Other factors that played a significant role in determining who to get to manage a client’s investments, were consistent investment performance, which 54% valued highly, value for money (51%), 42% cited cost transparency as important, while cost of management, at 42% rounded out the top five.
Mark Stevens, head of intermediary services at Investec Wealth & Investment, said, “Successful advisers know only too well the importance of providing a high quality service to their clients and it follows that they expect a similar focus on this area among their DFM partners.”
He added that, the high degree of overlap in the key factors cited by advisers when determining when to select a DFM and how they judge ongoing performance is encouraging because “it underlines the efficiency and transparency that characterises most successful partnerships.”
However, Investec noted, advisers were a lot less certain that the industry used the same criteria to select a DFM as they used to monitor ongoing performance, with only 39% saying they thought this was the case, while 35% said different factors were being used.
