Your value proposition, increasing margins and lowering costs

Financial Advisory

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Your value proposition, increasing margins and lowering costs

Experts:          Justine Randall, Tatton investment management
Facilitator:     Martyn Laverick, Managing Director, Phase 2 Consulting 


State of play

The meeting kicked off with Tatton taking us through a quick overview with regard to their proposition and what they do and then asked the audience what basically keeps people at the night. Unsurprisingly 68% of the attendees said regulatory tree costs and PI insurance were driving factors that get them awake at night and a smaller percentage of 14% said the downward pressure on fees.

The subject then got onto how firms engage with clients and how they articulate their proposition. Some feedback was around managing client expectations and not just around money but also around what they are trying to do with their finances so that they are realistic.

Some attendees also commented that some of the high-risk portfolios have done quite well and now show positive return compare to the start of the year. View was that investments are just part of the overall proposition and a lot more planning goes on around investments to help clients understand their finances and what can be achieved. Longer term views on investments are important and try to pick trends was seen as a bad idea.

Concerns around property funds and potential rebalancing given where property funds are at the moment was causing some firms some issues. This lead onto how easy it would be to offer a DFM solution that would resolve some of these rebalancing issues that firms are facing.

The attendees were asked do they use DFMs , have their own DFM funds and how they run client money. There wasn’t a consensus but people were happy to share their experience. One firm had had a negative experience White labelling a DFM proposition with their own brand only for the DFM to go bust. This had a negative impact on that firm’s own brand and this experience has put this firm off going down that route again. Another firm has a seperate Company that runs their model portfolios under a separate name. This gives them full control whilst protecting the main brand should something go wrong.


The input from the attendees clearly shows that this area had been thought about and that firms were looking at DFM is as away of providing clients with a more efficient service and attempting to reduce costs. Quite a few firms saw scale or lack of expertise as being barriers to running around DFM funds as well as the issue around capital adequacy. Therefore there is a market for fund management groups that can offer DFM services, white labelled or direct that will assist IFAs in this journey.