Citywire printed articles sponsored by:
View the article online at http://citywire.co.uk/wealth-manager/article/a700916
Brewins, Brooks and Quilter Cheviot sign up to new DFM service
by Dylan Lobo on Sep 05, 2013 at 10:36
Selectapension launched the facility this month in response to the growing trend in a post retail distribution review (RDR) world of advisers removing the risk of monitoring and switching pensions by deferring to discretionary fund managers (DFMs).
The firm said the new tool has been designed to enable financial advisers to consolidate their work and have a greater choice of investments, which will save them time on research and reduce risk.
Selectapension sees this trend of advisers using wealth firms as part of a bigger legacy shift for DFMs.
The firm highlights how financial advisers are consolidating client banks and investments, indicating the adviser community is simplifying their business models.
This in turn will impact legacy investments as DFMs can still pay introduction fees to financial advisers for additional investments but will need to alter their business models in a post RDR world.
Selectapension also draws attention to the shift in advisers moving from relying on default funds to actively selecting funds. This, the firm says, suggests advisers are moving clients to more tailored pensions solutions and as a result have an on-going commitment to monitor fund selection. As a result advisers are turning to DFMs to take on the management of these portfolios.
Selectapensions expect adviser dependance on DFMs to increase based on research from Investec Wealth and Investment dated June 2013 showing that 52% of advisers plan to increase their use of DFMs over the next 12 months.
Commenting on the launch of the calculator, Selectapension managing director Andy McCabe, said: 'Managing client portfolios can be onerous and requires expertise, therefore is time-consuming and potentially risky.
'As financial advisers are choosing to place this risk with DFMs, they need the tools to help manage this process. Selectapension are working closely with DFM providers and are adding DFMs to our system during August.'
News sponsored by: