Defaqto DFM satisfaction study reveals encouraging service improvements

12 March 2019

The study shows adviser satisfaction with discretionary fund managers (DFMs) improves overall but so too does the demand in terms of the service standards they received, meaning there’s still room for improvement.

Financial information business, Defaqto has published its annual review of the service delivered by DFMs as rated by financial advisers. The independent publication provides financial advisers with insight to help them benchmark their own personal experiences of DFMs with those of their peers.

Adviser satisfaction has improved in all but one of the fourteen categories, reversing last year’s trend that saw 10 out of 14 categories exhibit a fall in adviser satisfaction. Despite this positive development, adviser demands in terms of the service standards they receive have also increased. Discretionary managers should continue to strive for improvement, particularly in the areas that advisers find most important.

Top of the adviser importance league is the quality of staff – investment, while still falling short of expectations, this category has seen one of the most significant improvements. Two other categories that were of concern last year were ease of doing business and service. Similar to the quality of staff – investment, both categories have shown improvement since last year. Ease of doing business is a reflection of the adviser’s impression of all aspects of the relationship. This is now exceeding expectations.

For DFMs, advisers were asked to rate providers in relation to 14 categories:

 

Satisfaction category

Importance

2018

2017

Change

Quality of staff – investment

1

89%

84%

5%

Service

2

86%

84%

2%

Investment flexibility – range of options

3

88%

86%%

2%

Investment flexibility – range of assets

4

86%

84%

2%

Quality of staff – administration

5

83%

80%

3%

Existing business administration

6

85%

81%

4%

Ease of doing business

7

85%

83%

2%

Client on-boarding

8

82

76%

6%

Provider financial strength and resource

9

81%

80%

1%

Online facilities

10

67%

63%

4%

Accessibility

11

73%

66%

7%

Quality of literature

12

68%

61%

7%

Provider brand

13

70%

71%

-1%

Remuneration

14

65%

64%

1%

In addition, the study revealed that although down on last year, there is still a significant amount of investment business done on an advisory basis. This is split 60% multi-asset, to 40% single asset portfolios.

The survey indicated that a significant amount of new investment business over the last 12 months went the way of investment with decumulation in mind.

Pan Andreas, Head of Insight & Consulting (Funds & DFM), comments:

“Advisers are getting more demanding in their service expectations and while discretionary firms are certainly improving, there’s still work to be done. Four out of the top five categories in terms of importance still fail to meet adviser satisfaction expectations. These results should serve as a warning that firms should be mindful of adviser requirements and not become complacent.”

Download a copy of Defaqto’s DFM satisfaction study

http://ow.ly/9h6Y30o0c0E

ENDS

About Defaqto

Defaqto is an independent financial information business helping financial institutions, advisers and consumers make better informed decisions.

The company offers a complete package to support financial advisers with their investment advice. Defaqto Engage is an investment planning software tool designed for advisers.

Defaqto experts research, collect and continuously assess over 43,000 financial products in the UK of which nearly 10,000 are funds and fund families. Over 17,000 funds are analysed including fund performance, risk adjusted return ratios and costs which adviser can use to filter, sort, rank and analyse the options to make the most suitable recommendation for their client.

Defaqto’s Service Ratings form part of our range of ratings suite. Products are assigned a Star or Diamond Rating on a scale of 1 to 5. Whilst these ratings are based on facts not opinions, our Service Ratings are. We ask financial advisers to rate the services they receive. This collective information helps the industry in continuously improving standards by creating awareness of what elements of service work well and what elements don’t with providers.

Engage has a variety of workflows, from risk profiling through to research and recommendation. It can service a range of clients, whether they be looking to grow their wealth, consolidate assets or withdraw an income, generating an audit trail to satisfy regulatory requirements.

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