DFMs identify three reasons for IFAs to seek specialist investment services: market volatility makes funds more difficult to run; the retail distribution review (RDR) means many IFAs will have to improve their qualifications; and the cost of professional indemnity insurance premiums will continue to increase as will the risk of litigation.
Adrian Durham, chief executive of FNZ UK, the company running the infrastructure behind platforms at companies such as Standard Life, Axa and Friends Provident, told PM the next stage of platform development will effect further change.
“The RDR has driven change in the market and clients and financial planners, as opposed to investment advisers, are now more inclined to use a discretionary manager.”
Providers offering platforms to the advisory market will form links with DFMs allowing IFAs to create DFM panels more easily.
“If DFMs can access a platform, an IFA will be able to place 40% of a client’s allocation with one DFM and 20% with another in effectively the same vehicle,” Durham added.
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