To some extent, this was what the move onto platforms was supposed to achieve for advisers. On platforms, there would be choice of funds, tools for selection, choices of wrappers, the necessary kit to run the whole show. But the reality is that the investment piece requires continual research and monitoring, rebalancing and transactional activity, and in an advisory model, continual client involvement to approve switches.
None of the above features assist the adviser to achieve greater operational gearing, in fact they increase administrative functions and severely limit the numbers of clients that can be profitably serviced. Therefore, most advisers building their own brand’s investment proposition add a discretionary fund management component but keep the task of defining the investment mandate firmly under their own control.
Consolidation within the discretionary fund management sector will continue and with it adviser and client choice will reduce, creating more threatening competitors for advisers. The advisers of tomorrow have responded by keeping their focus on what they do uniquely well, advising their clients but with the specification of each investment mandate and the definition of their own investment service entirely out of the hands of other parties.
Nicola Robinson is corporate communications manager at Parmenion
LONG TERM VALUE
Nicola Robinson suggests that advisers perhaps will start to develop their own centralised investment proposition.
“The natural response of advisers will be to question whether referring clients to discretionary fund managers is the right choice for building long term value within their businesses.
“The focus must be on building their own brands and differentiating their services.
“By developing their own centralised investment proposition (CIP), advisers can deliver the outcomes their clients require, but with lower risks.”
