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Discretionary Fund Management – The Choice of the Savvy Investor

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.

Blacktower – For Proven DFM and Trade Desk Services

Blacktower’s expat financial advisers can help with a range of services for investors, regular savers and retiring ex-pats. This includes access to an expert-led, bespoke discretionary fund management servicesupplied by industry experts Quilter Cheviot.

We look forward to assisting you in growing and managing your wealth. Contact us today for more information.

*DFM satisfaction survey 2019 – https://defaqto.com/advisers/publications/dfm-satisfaction-study-2019/

Other News

Canary Islands Villa, Yours for 525 Bitcoins

BitcoinA luxury property in the Canary Islands is up for sale. No, this doesn’t sound like news, but there’s an important and unusual detail: the five-bedroom villa in the lofty hills of La Caleta, Tenerife, is being sold for 525 Bitcoins (approximately €3.2 million).

But why would someone exchange a near 2,700 square metre plot, comprised of house, swimming pool, gardens, Atlantic views and palm-lined outdoor eating area, for a “virtual currency”?

We have long been told that Bitcoin is a bubble that’s going to burst, so surely exchanging such a valuable asset for an unstable and unregulated “pseudo currency” is financial madness of the most extreme kind. There are certainly detractors of the currency, such as Warren Buffet, who would argue this point. Perhaps the vendor’s expat financial advisers in the Canary Islands should reach straight for the phone to dissuade him from such a move?

Read More

Safeguarding your Pension and Assets

Many UK expatriates do not realise that even if they have left and are no longer resident in the UK, they remain UK-domiciled and therefore subject to UK Inheritance Tax (IHT) on their worldwide estate at a rate of 40 per cent after allowances. This can come as a major shock. 

Brexit

What can be done about this? There are several options. 

Transfers of wealth on death between husband and wife are exempt from IHT, but only if the spouse is also domiciled in the UK (or both are non-domiciled). This catches out many expatriates who have married a foreign passport holder who is likely to be domiciled elsewhere. Even then, the IHT is only delayed rather than avoided, because on the death of the survivor the tax will be payable on the passing of the family assets to the next generation. 

Read More

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