Colin Low is financial planning director and a chartered financial planner. He works with the senior paraplanner to determine the processes the firm puts in place to make recommendations that provide the most consistent and appropriate outcome for our clients.
Kingsfleet Wealth is a chartered financial planning firm. It works with solicitors and accountants, assisting them in financial planning. It has operated a fee-based model since launch.What are the most important factors for you when selecting a DFM?
Listening to our approach and offering a complementary service is crucial. Too often we meet DFMs who tell you what they are going to do before they have listened to your needs. The other important issue for us is the allocation of an experienced and knowledgeable member of staff. I can tell when people are bluffing, and it is embarrassing to sit in a meeting with a client and realise the representative is unsure about their own process.
What are the least important factors?
Funds under management mean nothing – that just means the DFM has accumulated assets. It’s like saying that you should buy a car with 200,000 miles on the clock: it might have worked in the past but it is not necessarily appropriate now. The ability to pick individual equities is not important. With all due respect, we remain unconvinced that a DFM can do this better than Neil Woodford, Tom Dobell or Adrian Frost. Either buy an index fund or select an active manager.
What will make or break a pitch?
It comes down to two things: can the message be supported by evidence and do we get on with the individuals that we are meeting with? If the message cannot be supported by documentary evidence then we would struggle to recommend the service to our clients. Up until this point, we have outsourced very little, which is why we are exploring a ‘third way’, where we can work with a DFM to form an investment committee and be a part of the process.
Total assets outsourced:
Approximately £5 million
Skandia, Novia, AXA
Average portfolio size:
Which DFMs do you currently use?
Hawksmoor, 7IM ‘Good ones’
Saltus, Standard Life Wealth ‘Could do better’
What do you value most in a DFM?
Past performance: 4
Size of firm: 1
Strength of process: 4