Discretionary fund managers and your financial strategy

Like almost every industry, financial services is undergoing an enormous change. Despite the turbulence, Carrick Wealth continues to place its clients’ needs at the core of its business philosophy and implementing best practice that ensures the highest levels of financial advice are maintained.

A crucial element in negotiating the changes has entailed advising and offering a discretionary fund manager (DFM) as part of Carrick’s financial and wealth management strategy.

Carrick Wealth Chief Executive Officer Craig Featherby said Carrick has always put the client first. “That means recognising and focussing on our core strengths, namely financial planning, ongoing communication, monitoring of a client’s plan and personal circumstances, and building relationships with those who have the expertise and wherewithal to ensure our client’s portfolios grow in line with expectations.”

Using a DFM is not a new concept: high-net-worth individuals experienced in the investment world and individuals with large investment portfolios often use the services of DFMs. But, as Featherby pointed out, the entry threshold — that is, the minimum investment amounts —required by DFMs often prevented some clients from including DFMs in their financial plan.

“Carrick’s partnership with selected DFMs has meant we are now able to offer that access to all of our clients who wish to make use of them,” explained Featherby. “Recommending and agreeing to appoint a DFM enables the Wealth Specialist to focus on their priorities, leaving the DFM to exercise professional discretion in building and managing a portfolio of investments on the client’s behalf, and according to the client’s risk profile.”

The selected DFMs are experienced professionals who monitor the markets on a daily basis and make the necessary strategic and tactical allocation decisions. They operate globally in multiple jurisdictions and are judged on their consistent track record backed by robust administrative and operational structures.

“One of the three pillars of Carrick’s business philosophy is transparency, along with integrity and professionalism,” said Featherby. “We demand, and see to it, that regulatory and compliance standards are met by all our DFMs.”

He said there were a number of other sound reasons for using a DFM. A DFM will diversify the client’s investments, save on costs through bulk dealing, and will have access to highly specialised funds are not always available to individual or new investors. They will also invest in active managed funds and passive, low-cost exchange-traded funds.

“On top of it, the client need have no concerns about constantly monitoring their portfolio. By working closely with their Wealth Specialist, and through regular reports showing the performance and weighting of the portfolio, the client will be able to see immediately whether their financial planning objectives are being met, and act accordingly.

“With so many thousands of funds and investment vehicles out there, it makes sense, to have someone with the right expertise, skills and daily hands-on ability to look after your portfolio, and we now provide all of our clients with access to that service,” he said.

“This shortens the decision-making time so that any adjustments and allocations will be based on the market circumstances, which means our client’s money is always in the market and, more importantly, in the right places in the market.”