Report reveals 'murky world' of DFM pricing

clock

Discretionary fund managers are failing their customers by adopting opaque and expensive charging structures, according to a damning report.

Analysis of the DFM market for Skandia by consultancy the lang cat compared the total cost of ownership (TCO) for clients using one of five similar DFM services on seven different platforms. It found wildly differing prices of up to 70bps, with some of the most expensive offerings topping 1.85%. Lang cat principal Mark Polson (pictured) said DFMs had escaped the downward pressure on price seen in the rest of the investment industry. “TCO is a hard beast to pin down but, when you do, you can find some wildly varying results,” he said. “We are quite used to dealing with opacity in...

To continue reading this article...

Join Professional Adviser

  • 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 Managed solutions

Partner Insight: Is volatility an advantage for active managers?

Partner Insight: Is volatility an advantage for active managers?

Given their mandate to pick the winners, market volatility is often said to be favourable for actively managed funds. But is this actually the case?

Stephen Lawrence, Head of Indexing Research, Investment Strategy Group, Vanguard
clock 18 August 2023 • 10 min read
by Justin Onuekwusi, head of retail multi asset funds at LGIM will lead the MPS

Richmond Wealth partners with LGIM for model portfolios

Six model portfolios are set to be created as part of the collaboration

Kathleen Gallagher
clock 20 February 2023 • 1 min read
Assessing the many nuances of model portfolio construction

Assessing the many nuances of model portfolio construction

'Evidence-based investing is simple in concept but complex in execution'

Yariv Haim
clock 15 February 2023 • 5 min read