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The Federation of European Independent Financial Advisers

Discretionary fund management (DFM) is an increasingly important component of the expat financial advice offering.

There are many reasons for this; from the way it frees time for the adviser to focus on wealth management, to the flexible, bespoke and client-focused level of service offered by the DFM firm. It is all about providing solutions that work for the client, and by allowing a trusted, expert third-party to make decisions related to asset allocation and fund selection, clients can have increased confidence that they will achieve their financial goals.

The DFM Phenomenon

The popularity of DFM services among wealth managers and expat financial advisers has arisen as a result of various factors, including the advent of the canny client who demands a diversified portfolio that aligns with their wider financial objectives.

Of course, some investors may choose to invest directly into a multi-asset collective investment fund, but for others the portfolio service of Discretionary Fund Management may be a better match for their requirements.

This is partly because of certain regulatory and reporting features of a DFM service that make it easier for clients to view their portfolios for a transparent breakdown of trading and asset management. This aspect of the DFM service has been greatly aided by new technologies, and ongoing developments in this regard mean that is only likely that the client experience will be further enhanced over the coming years as technological solutions result in even greater transparency and efficiency.

And, of course, this efficiency is another key factor in the popularity of the DFM service. A DFM portfolio can be created and customised in a quick and cost-effective way that appeals both to advisers and their clients, saving time, money and unnecessary stress.

A Working Partnership

A DFM service is essentially a partnership between adviser, client and a fund manager. It is through this relationship that the client is able to develop a bespoke portfolio supported by two kinds of specialist expertise: the wealth planning experience of the expat financial adviser who understands the client’s needs and objectives and day-to-day portfolio management of the DFM firm who know and understand the markets.

The DFM Special Ingredient

In 2019 a survey of 289 financial advisers by Defaqto* found that as financial advisers have become increasingly more connected to DFM services, they have also become more demanding. However, despite the many technological advances that today benefit the DFM service, advisers still rate one key thing above all else: the quality of the people on the DFM investment team.

Access to the fund manager is a core feature of this personal requirement; a good fund manager should not only manage the portfolio effectively, they should also be available to speak with the adviser and the client directly. There is huge reassurance to be had from knowing that you can pick up the phone and speak directly with the person who is responsible for your money.

​​​​​​​​​The above article was kindly provided by Blacktower Financial Management Group and originally posted at: ​​​​​​​​​​​