It is a relationship many have tried to characterise, pin down and predict, but as with couplings of a more amorous nature, it is not always easily defined.
Latest research from Heartwood Investment Management suggests IFAs are starting to warm to the idea of outsourcing to and depending on DFMs for investment decisions, much like an opinionated girlfriend will become a pliant wife, or so men like to think anyway. (Heartwood provides a DFM service so it is not surprising it finds itself irresistible to advisers.)
The supposed driver of the increasing enthusiasm for working with DFMs is the nearing deadline of RDR implementation, which much like a biological clock is ticking loudly and incessantly.
But as with the fairer sex IFAs have pre-requisites they like to be met – a decent track record and some assurance they can maintain a certain amount of control over the relationship cited as the two most vital.
Breaking the mould
There will also always be those who like to break the mould (thank heavens) and refuse to succumb to societal expectations – the Queen Elizabeth I of the IFA world.
To counteract this, there will also be firms who allow themselves to pair with a DFM in order to have an easier life, or, as the challenges of the new financial landscape post 1 January 2013 emerge, give up entirely and allow themselves to be taken over by a larger firm, as with those that have been acquired by AFH Financial Group since the start of the year.
So where does this leave us with the uneasy metaphor of a marriage between IFAs and DFMs?
For some it will be love at first sight, others will travel a rockier path to harmony and others still will try a few pairings before they are satisfied.
Thankfully, the process of terminating an IFA-DFM relationship is, in most cases, less painful than a divorce. Let’s just hope the kids (or clients) don’t suffer the fallout.
How do you think the IFA-DFM relationship is set to evolve? Use the comment box below…
