Moderate — looking for a return that beats inflation and cash deposits. Uncomfortable if their investments rose and fell in value very rapidly; however, they do accept the possibility of some capital loss. Positive — searching for good returns ahead of inflation, and accept that this strategy carries a modest bias towards higher-risk assets. Comfortable with the value of their portfolio fluctuating, and can tolerate losses that may be prolonged in nature. Adventurous — looking for the potential for a higher return in the longer term, and recognise that this may result in the value of the portfolio fluctuating, possibly significantly, especially in the short to medium term.
The majority of their capital will be invested in higher-risk assets, which means a significant percentage of the capital sum could be lost. Once they have a detailed understanding of your circumstances, appetite for risk and investment goals, the Discretionary Fund Manager can recommend a portfolio designed specifically to meet your needs.
To do this, they must:. A typical portfolio is made up of a selection of different assets across different geographies. The DFM must consider asset mix, volatility, cost, market risks and the potential range of returns.
All of these will be discussed with you detail. Depending on how involved you want to be, the DFM will talk to you about individual holdings within each asset class. This can be particularly important to investors whose political or environmental views that would mean they want to avoid investment in certain companies and countries. The process of building a portfolio is always one of collaboration between you and the DFM. You can choose to be more or less involved in the planning process, but you will be asked to approve the final portfolio before any investments are made.
Once the portfolio becomes a reality, the DFM will regularly review it against its objectives, ensuring it stays on track. The extent to which you want to be involved in this process depends on you. Some people like to be called daily, while others are happy with an annual review.
We carry out full due diligence, applying rigorous analysis and control to all stock and fund selection decisions. Our expertise and performance is authenticated by ARC Asset Risk Consultants , who are unbiased consultants that report on performance. Please navigate to a service or product page and add the document to your brochure to continue.
Your brochure is on its way. We hope you find this useful. What is Discretionary Fund Management? Take a little more risk in order to make your money work harder for you.
Consider your tax position when making investment decisions. When coupled with additional fees, such as platform or product charges, the benefits of a more sophisticated portfolio might be lost.
When judged on performance, DFMs fall into the same category as any other active investment managers, that is, they fail to consistently outperform the market and thus struggle to justify the expense incurred. In most cases, a well-constructed passive investment portfolio will produce better results and give you the benefit of financial planning advice alongside the investment management services for a total expense ratio below that of an international Discretionary Fund Manager service.
Only consider if low cost passive solutions are part of the Discretionary Fund Management service. We suspect that many traditional DFMs maintain the traditional status quo of the financial services industry.
This money comes from your returns and we suspect that technological change given computer beat man as far back as and the increasing mountain of evidence against active performance, will soon re-shape this marketplace. Discretionary Fund Management Discretionary fund managers use professional discretion to buy and sell investments. What is discretionary fund management? Why has my financial adviser recommended a DFM? Does a discretionary fund manager work? In the international environment, this method of investment can also be very expensive, opaque and convoluted.
Clients will also get an annual report detailing the events in the portfolio over the year, but this will be more than a simple valuation - it will contain the information clients need to compile their own accounts, to fill in their tax returns or calculate their capital gains tax liability with their accountant.
The information contained in this document is believed to be reliable and accurate, but without further investigation cannot be warranted as to accuracy or completeness. Start talking to us today about your future financial plan and we can help you make sure it is a resilient one. Book free consultation today. Home Insights Why use a discretionary fund manager?
Investment Management Why use a discretionary fund manager? It does not, however, mean that you give up all control of your portfolio. The value of investments can fall and you may get back less than you invested.
0コメント