New research suggests that one of the main conerns advisers that choose not to outsource to discretionary managers have is being able to justify the increased fees to clients.
The second part of the Rathbones and CoreData’s value of DFMs report released today says there is no “damaging effect” on advisers’ credibility if they outsource investment management.
Depsite this, two thirds of respondents believe it would be a struggle to prove their worth to clients if investments were managed externally.
Twenty-seven per cent of surveyed advisers also fear external managers will steal their clients.
Losing control of investments or the value chain (75 per cent,) and the cost of outsourcing cost (76 per cent) were also primary concerns.
On average, advisers who do use DFMs spend a quarter of their week meeting clients, according to Rathbones.
The findings show 45 per cent of those advisers conduct more meetings with clients currently than when investments were managed in-house.
More than half (55 per cent) say client trust has increased as a result of using a DFM.
A total 97 per cent of respondents to Rathbones also say end-user clients are satisfied with the use of third parties.
Rathbones Unit Trust Management chief executive Mike Webb says DFM solutions should look to support the adviser/client relationship more positively.
He says: “[This] will help ensure the DFM industry continues to make changes to provide suitable, tailored services and address any of the lingering fears advisers might still hold.”