True bespoke discretionary fund management is not available to clients with £250,000 or less to invest, according to consultancy firm Asset Risk Consultants.
Speaking at the PIMS conference on board the Aurora last week, Asset Risk Consultants managing director Stephen McMahon said clients are seduced by discretionary fund managers because they think the DFM is managing their investment on an individual basis.
He added that if a fund manager is managing investments well, there may not be a need for bespoke management.
McMahon said: “If fund managers are using the top set of investments they want to use then why are we asking them to go off to the side and do something else?”
Also speaking at PIMS, Baigrie Davis managing director Ian Howe (pictured) said there is a danger some DFMs overplay their role in managing investments.
Howe said: “Some DFMs over-engineer and over-egg things to create an air of mystery in the art of managing money, whereas a simple approach seems to be the best way forward.”
From 31 December, the regulator banned referral payments where the adviser refers a client to a DFM and also provides the client with a personal recommendation on a retail investment product. In March, it announced it is considering extending the ban to pre-RDR business.