Investments  

Operational burdens and obligations of discretionary permissions

This article is part of
Guide to MPS and outsourcing to a DFM

If a firm is outsourcing to a DFM, the adviser should be confident that the DFM can demonstrate the following:

  • A clear investment philosophy and robust investment process.
  • A track record of consistent, cost-effective, risk-adjusted returns in different market conditions.
  • Strong capabilities, governance and oversight.
  • Good relationship management and great communications – particularly in challenging or volatile markets.
  • Good support for the adviser in terms of expertise and collateral.
  • Financial resilience.

Morrow adds: “Outsourcing also gives the adviser firm the option to procure different DFM solutions for different client needs, and to change/switch out DFMs if the service is no longer meeting the standard required, or client needs change.”

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Ima Jackson-Obot is deputy features editor at FTAdviser