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Platform availability increasingly important to IFAs when picking DFM

Advisers are increasingly looking for platform availability when choosing a discretionary fund manager, new research from Platforum shows.

While last year only 27 per cent of surveyed IFAs cited availability on their preferred platform as one of the most important factors within their DFM due diligence, this year it was 40 per cent- the biggest year-on-year jump among preferences.

The Platforum research, which surveyed 193 advisers, concludes: “Advisers are reluctant to switch clients from platform to platform and so they limit their DFM choice to those readily available to them on their current platforms.”

The report adds that often DFMs can onboard portfolios onto a specific platform in the case of sufficient client demand, but”some platforms are more responsive than others to such requests”.

Most important factors when selecting DFMs (year-on-year comparison) 

The biggest priority for advisers, when searching for a DFM is overwhelmingly “fees and charges,” with three quarters of IFAs giving high importance to this in their DFM due diligence.

Investment performance came in second on the list of most important due diligence areas at 54 per cent.

While DFMs are finding it difficult to differentiate themselves from their competitors in these particular areas, they identified a key point of differentiation in providing advisers with all the reporting and information they need, so they can better manage their client relationships with the end client.

The survey found a significant drop in importance that IFAs give to client service, with only 26 per cent, however.

Advisers are becoming more keen to manage every bit of the client relationship and to keep the DFM in the background, Platforum researchers conclude.

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  1. take the high road 30th July 2019 at 2:51 pm

    Yes, this is all very well however when choosing a DFM through just about any/all platforms the investment management and reporting is also a major factor.

    Also, if you pick a particular DFM strategy under a platform, you cannot expect to get any sort of personalised service from the DFM(such as the management of CGT, investment reports for the client meeting, auto-ISAs etc) which is a major downside unless you can create these reports yourselves…and personally, i’ve yet to see this sort of service from an IFA which compares to the real Macoy from a quality DFM outfit.

    So, my message is this; think about the reason why a DFM solution is best for your client then compare what you can get from the DFM directly v’s the similar platform offering. And finally, remember some platforms will only rebalance at certain intervals(i.e quarterly) whereas, the true strategy will be done when the DFM decides to make changes.

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