The Capstone ETF Investment Platform is the firm’s latest offering and, according to managing director David Halley, the service has experienced a significant amount of interest since its launch.
Halley said DFM services are a hot topic among financial advisers at the moment. “I think it’s the future of the business, but very few firms are acting on it in Asia,” he said. “In Asia there is still a traditional model where clients want the adviser to manage their money.”
“Now the world is becoming more regulated, advisory firms are keen to take the risk off their backs and simplify their business model by using DFM services. But a lot of firms are outsourcing instead.”
Capstone’s new service is managed by five of the firm’s advisers, including Halley who has previous experience in fund management.
“By centralising client accounts through the DFM service, our business is able to become more efficient which adds a lot of value to the company"
By using an interactive broker account, the investment managers can track the performance of the portfolios on a day-to-day basis and are also able to make quick changes to the investments to suit the clients’ risk profiles.
The investment platform – which only uses exchange-traded funds (ETFs) – has a charge of no more than 2% per annum, which includes both the annual management change and a set-up fee.
Halley also highlighted that there are no extra fees for using the service because it is all managed internally by Capstone’s advisers.
Biggest issue
“Fee drag is the biggest issue for investors,” he said. “We have tried to create something which is simple, effective and cheap for our longer-term clients.”
“We always wanted to go fee based as much as possible and this is the way to do it. The DFM service offers a steady income stream for the staff and means the advisers can spend less time on admin and more time on client relationships.
“By centralising client accounts through the DFM service, our business is able to become more efficient which adds a lot of value to the company, while also keeping clients happy by giving them access to a transparent and flexible investment vehicle.”
