The research company will rate the propositions on a scale of one to five, based on the features they offer and the quality of their service offering to the adviser market.
Criteria includes: the value of discretionary assets under management; the range of traditional and alternative investments permitted; minimum investment and withdrawal levels; accessibility through tax wrappers; back office integration capability; approach to fund manager rebates; and transaction and other administration fees.
“We have seen a significant growth in the number of advisory businesses that are outsourcing to a discretionary, or are planning to do so in the lead up to 2013 and beyond,” said Fraser Donaldson, Defaqto’s insight analyst for funds.
“When looking to outsource to a discretionary fund manager advisers need to treat the partnership as a long-term business relationship – robust due diligence is therefore critically important. However, the discretionary space, both bespoke and model portfolio services, is crowded and propositions vary widely. As a result, it is understandably difficult for advisers to evaluate which solution will best suit their business and client base.”
Donaldson added that, to achieve the highest level of rating, propositions will need to demonstrate “a high degree of dedication to the intermediated market, flexibility, transparency, and high levels of personal and online service.”
At present, the ratings service covers 35 bespoke propositions and 45 model portfolio services. Full ratings are available through the Defaqto website: www.defaqto.com/star-ratings/dfms
