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Adviser satisfaction with DFMs falls

tickAdviser satisfaction ratings with discretionary fund managers have dropped in the latest index from Defaqto.

The consultancy asked advisers to rate discretionary fund managers across 14 categories in relation to their importance.

The survey showed that investment flexibility was most important for advisers, in terms of range of assets and range of options. Quality of investment staff was also deemed important by advisers.

While four out of the top seven aspects of service are either meeting or exceeding adviser expectations, one more than last year, Defaqto says overall satisfaction levels have fallen.

Defaqto insight and consulting head for funds and DFMs Pan Andreas says: “The industry should not be giving themselves too many pats on the back or become complacent, as a closer look at the numbers reveals that overall, satisfaction has fallen by some 2 per cent per cent on average, and individually, satisfaction has fallen in 10 out of 14 categories.”

He says this is a worrying trend that needs to be addressed.

Andreas says: “With a general fall in adviser satisfaction and only 5 out of 14 categories exceeding expectations, discretionary managers are going to have to up their game to continue competing with their peers and other investment outsourcing avenues.”

Satisfaction category Importance

Average Score

2017        2016

Investment flexibility – range of assets 1 84% 83%
Quality of staff  – investment 1 84% 91%
Investment flexibility – range of options 3 86% 83%
Service 4 84% 87%
Ease of doing business 5 83% 84%
Existing business administration 6 81% 83%
Quality of staff – administration 7 80% 83%
Client on-boarding 8 76% 79%
Provider financial strength and resource 9 80% 82%
Online facilities 10 63% 63%
Accessibility 11 66% 64%
Quality of literature 12 61% 69%
Provider brand 13 71% 66%
Remuneration 14 64% 67%

Source: Defaqto

Choosing a model portfolio service through a platform is growing in popularity among advisers, according to the Defaqto research, whereas choosing a MPS through direct custody is declining.

It says the increase in selecting MPSs through a platform could be due to the lower minimum investments available through a platform as well as advisers wanting to feel more in control of their clients.

The survey found two thirds of advisers run some client portfolios on an advisory basis.

It also showed that, of the advisory business placed, 60 per cent is in multi-asset funds. Defaqto says this confirms the popularity of investment outsourcing.


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  1. Only 50k compensation. Beaufort collapse shows ring fence a myth.

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