With outsourcing on the up post RDR and the number of DFM firms rising, Wellian has decided to offer prospective clients a little extra guidance in what it sees as best practice for hiring one.
The checklist consists of five points that Wellian suggests advisers factor into their selection process. Firstly, it says that advisers should consider DFM’s of all sizes rather than choosing from a small number of the most recognised brand names. Next, advisers should produce their own due diligence questionnaire and apply it to any DFM they select before signing on the dotted line.
Wellian’s other recommended steps are to identify third party endorsements such as ‘star ratings’ or industry awards, resist the temptation to cut corners to save money and make sure that the DFM is of a similar scale to your own business rather than going for those with the largest AUM.
‘The growing burden of increased regulation and compliance has meant that advisers are progressively looking to outsource where possible,” said Chris Mayo, Investment Director at Wellian.
He added that the larger number of DFM’s is providing advisers with plenty of choice, but he believes it has also meant that many advisers are now finding making decisions on hiring more challenging and initially overwhelming.
