Is the DFM sector behind when it comes to changing fees?

‘A lot of the DFM community remains AUM-based’

Isabel Baxter
clock • 4 min read

The discretionary fund management (DFM) community has not noticeably changed fees as much as the advice community, Sparrows Capital investment director Mark Northway told Professional Adviser.

He said that since Consumer Duty was implemented, advisers have noticeably changed their fee structures, but DFMs have not changed the way they charge as significantly. Northway noted that much of the DFM community still has an assets under management (AUM) fee structure. "We have a bit of an issue with that, because the workload associated with a larger AUM around single model is no larger than the workload that's associated with a smaller AUM," he said. "Whilst it's important to cover costs and have a profit element, that linear relationship is a little bit difficult to justify."...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on DFM & Model Portfolios

MPS provider ups governance game as part of FCA requirement

MPS provider ups governance game as part of FCA requirement

Ebi has made several board and executive changes

Isabel Baxter
clock 09 July 2025 • 4 min read
Chris Justham: Why MPS are the flat whites of the investment world

Chris Justham: Why MPS are the flat whites of the investment world

Coffee and MPS, easily

Chris Justham
clock 02 July 2025 • 3 min read
MPS: Would you trust AI to replace human decision-making?

MPS: Would you trust AI to replace human decision-making?

Firms increasingly exploring AI use to push gains even further

Tony Wilkinson
clock 26 June 2025 • 4 min read