Why DFMs are switching to a unitised funds approach

Significant cost benefits

Discretionary fund managers (DFMs) have enjoyed a boom in demand for their services in recent years: assets under their management grew by almost 20% between 2014 and 2016 to £263.2bn, according to research from Defaqto.

The development of the portfolio model approach to discretionary management was an example of the way the investment world evolves to meet new requirements from clients.  But as this market has developed, the limitations of the model portfolio approach have become more apparent; it can be a highly effective form of fund management, but it is not the most economical route. Brewin Dolphin adds passives range to managed portfolio service Relatively high costs and the fact that every transaction in an account may be liable for CGT means there is a sizeable risk of client disappointment...