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Paradigm DFM continues strong inflows from advisers

The discretionary fund management service owned by the parent of IFA support business and mortgage advisers Paradigm is continuing to see strong inflows from advisers in the company since its IPO earlier this year.

Tatton Asset Management split into three subsidiaries when it floated in July: Tatton Capital Limited for DFM services; Paradigm Partners for support services and Paradigm Mortgage Services for mortgage advice.

In results for the six months to September released today, Tatton notes that there has been an increase in the number of Paradigm advisers using its discretionary portfolios.

Discretionary assets are up 15 per cent since March to hit £4.44bn, averaging more than £80m a month in inflows.

Tatton is reporting a 42 per cent profit margin on discretionary business, up from 35 per cent for the six months to September 2016.

Money Marketing reported in May on how Paradigm advisers and others were offered equity stakes in Tatton on a first come, first serve basis when joining the network. Around half of the firms that used Tatton at the time were equity holders, chief executive Paul Hogarth said.

Tatton says that of the 49 firms that joined its DFM service over the last six months, 36 were new to the group. However, the majority of the 286 IFAs using its DFM portfolios are still clients of the group.

The results are the latest example of significant inflows at companies that sell both investments and other services to advisers, as highlighted in the FCA’s recent asset management market study.

Overall, Tatton made a group profit of £540,000, but would have made an additional £2.6m without costs related to the IPO.

Hogarth says: “We are seeing unprecedented demand for a low-cost DFM service to the mass affluent market place served by the IFA sector, which the Group is ideally placed to capitalise on. Our unparalleled offer is challenging the existing off-platform, traditional incumbents, by providing the mass-affluent with the kind of investment portfolio management usually the preserve of the very wealthy. This is a game changer and has set us on a firm path of growth.”

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  1. The item says they are a Low Cost DFM, I thought their typical AMC was about 2-3%.

    That does not sound Low Cost.

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