Is the DFM cost war in danger of leaving suitability behind?

'Vanilla products with little differentiation'

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To thrive in this flourishing market, DFMs need to be run cost effectively
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To thrive in this flourishing market, DFMs need to be run cost effectively

As cost competition intensifies in the discretionary fund manager (DFM) market, Jon Yarker explores whether there is a risk of client service being negatively impacted as a result.

Over the past few years DFMs have capitalised on a growing demand for outsourcing investment functions from advisers. The advantages for those using this route are clear: for a fee they can offload the burden of investment, and the significant time and resources this requires, to a third party. The adviser can then focus on their core responsibilities, namely providing financial planning and advice to their client bank. Unsurprisingly, the DFM space has grown significantly as a result and competition has intensified between these players. To thrive in this flourishing market, DF...

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