Fraser Donaldson: Home truths on DFM due diligence

Lessons to be learned

Fraser Donaldson's wife said she was the wrong person to ask what a client might expect from a discretionary firm as she knew nothing about investment. Here he shows why this made her exactly the right person to ask

It may sound obvious, but the best way of undertaking good due diligence on discretionary management - or any other investment product for that matter - is to listen carefully to the client in the first instance. It is the job of the financial adviser to interpret the needs and concerns of the client and then select the most suitable option. Very much a hypothetical question, but I asked my wife what she would want to know if she was considering handing over £100,000 to a discretionary firm with some future date and target in mind. We kept it simple: 20 years and retirement funds.  ...