Frequently asked questions
Your firm will receive:
- Investment and administrative support from our regional office investment team.
- Technical and business development support from our regional development managers.
- Regular adviser-focused communications and industry commentary.
Quilter Cheviot focuses entirely on the provision of investment management services. We do not provide financial advice.
Yes. We provide clear, regular and comprehensive reports to keep you and your client fully informed about the progress and structure of their portfolio. Our regular reporting includes an investment summary, valuation and statements and we also provide a full tax year-end report as standard.
Yes. You and your client will always be able to speak directly to the investment manager making the investment choices. We do not divide the roles of relationship and investment manager. Your client’s investment managers are reachable, reliable and professional. Our Regional Development team provides advisers with additional support and technical expertise.
With offices in London and across the UK as well as Jersey, Dublin and Dubai, we are ideally placed to provide a responsive, professional, local and personal approach.
Our investment managers are supported by assistants, a dedicated research team and an in-house back office. Each investment manager is based in a team. Should an investment manager be absent, another member of the team will manage the portfolio and will be on hand to take action or to answer any enquiries.
Yes, we facilitate adviser charging. For SIPPs and offshore bonds, adviser charges are usually taken from the provider directly, but we are able to pay adviser charges for some SIPP providers – ask your development manager for details.
With £23.3bn in funds under management (as at 30 June 2020) we have the institutional buying power to reduce the cost of collective funds. Wherever possible, we recommend investment in funds where the fund manager can make an institutional line available.
We will hold your client’s money as client money, in line with the FCA Rules. Among other things, these say we must hold your money in a client bank account, set up with statutory trust status. This means we will separate your funds from our funds at a bank, as allowed by the FCA Rules.
For further information, please see our Terms and Conditions
We have a strong technical research team with over 20 qualified in-house analysts, which has the responsibility for managing fund research and analysing all third-party manager investments. Research covers all open-ended and closed funds across all regions and asset classes to find the best managers in each area, region and asset class. This means you can be confident that all monitored investments held in your clients’ portfolios are fully researched and have been subject to due diligence.
We regard benchmarking as an integral part of portfolio management and subscribe to independent industry performance surveys including Asset Risk Consultants, Defaqto Enhance and the WM Charity Index. Our core investment strategies are benchmarked against industry standard or composite benchmarks to ensure that asset allocations are aligned with industry norms and their published risk profiles. We provide portfolio performance figures and benchmark index in our regular reports.
Yes, we can supply data via IRESS, Intelliflo and Enable. Please contact us if you want to access client valuations through any other back office system.
Yes, these are updated daily and are available through our website.
In line with FCA Rules, we will register or record investments which can be registered which your client’s has bought through us (1) in your own client’s name, (2) in the name of a nominee owned by us or our affiliate, (3) a recognised or designated investment exchange, or (4) by another custodian.
For further information, please see our Terms and Conditions
It is entirely counter-productive for us as businesses to disrupt the relationship between an adviser and their client(s). If any DFM gains a reputation as a company that is likely to do so they will rapidly lose the goodwill and trust of advisers. We might benefit once from taking complete ownership of a single client relationship but can be assured that that client’s former adviser is never going to refer any clients to us in the future. As DFMs we all depend on the advised market as the primary distribution channel for our services. Setting ourselves against the prime movers and influencers over the consumers of our services would be commercial suicide for any of us.
Taking this question at face value which is to determine the differences between an advisory investment proposition and a discretionary one, there are three critical points to consider:
- An advisory proposition requires the adviser to establish contact with the client, for the client to approve the portfolio adjustments which may have challenges if the client is not in the same time zone as the adviser, may not be contactable, or just doesn’t want to think about any portfolio adjustments at that time. The discretionary manager on the other hand can take advantage of short living market opportunities, perhaps can get leverage of the whole book size (or many portfolios at the same time), and reduce or eliminate the workflows for client communications and confirmations when adjusting portfolios.
- An advisory proposition requires the investment adviser to be accountable for investment performance. The adviser stands or falls by his or her track record of investment management, failure to meet client expectations in this area will create tensions between adviser and client. Appointing an external manager alters the dynamic – essentially the adviser crosses to the same side of the conversation as the client, when investment performance reviews are taking place. The adviser is now the experienced investment professional able to hold the DFM to account on the clients behalf, should investment performance fail to meet expectations.
- Managing portfolios requires an ability to design and implement an investment process capable of serving all segments of an advisory business. The process needs to be backed by an ongoing research capability to source suitable investments for the client. Both these requirements are time and labour intensive, detracting from the time and labour that can be directed towards core financial planning activity which is more likely to pay off in an adviser meeting their clients’ expectations.
Rather than making a statement that it should always be the adviser or it should always be the DFM this question is better answered by adopting a model that suits the two businesses concerned. Some advisers will work with us on the proviso that they remain responsible for the assessment of investment suitability, others that they would prefer to shift that responsibility to the DFM. Either approach is perfectly valid, provided all parties can draw up clear lines of responsibility between themselves with those responsibilities being communicated clearly to the client. It’s worth noting that when an adviser chooses to use a DFM then they can opt in or out of choosing responsibility for investment suitability. But whatever approach is taken the adviser will always be responsible for suitability of the investment proposition being recommended i.e. whether a DFM solution is right for the client or whether that client would actually benefit more from a multi-managed or single asset fund solution provided on an advisory basis.
Straightforward. Moving portfolios should require nothing more than completion of in-specie transfers from DFM A to DFM B. If a DFM is unable to offer you that option then it should be a warning light for you when conducting your due diligence. In-specie transfers of Crest and Euroclear stocks should complete in a matter of days, assets held with collectives managers may take slightly longer but should still be easily transferable. What is crucial is that assets can be moved from one DFM to another on the basis of a single instruction from you and or your client to the DFM managing the portfolio. The DFM should not have to sell the portfolio, thereby triggering capital gains or locking in losses by liquidating the portfolio at an inopportune time.
Dialogue- an open exchange of information between adviser firm and DFM is critical. The DFM should be able to provide you with clear information about how they measure and manage investment risk. Additional support can come from the use of third-party risk profiling tools but these can only be part of the overall picture. At the start of any relationship both firms should conduct a risk mapping exercise to agree definitions for any ongoing relationship. These should be reviewed and verified in practice by an ongoing series of review meetings held between your firm and representatives from the DFM firm.
Be structured and organized in your approach. Start by reviewing your own client base and determine which clients might benefit from a DFM solution. Use third party consultancy services (free at point of use to advisers e.g. Defaqto, ARC) to provide you with a long list of providers. Use the filters provided by those services and your own judgment to draw up a shorter list of providers capable of meeting your client requirements. Analyse and question providers on your short list more closely – use RFIs, request meetings with representatives of the firm, take soundings from peers. Once decided upon your provider(s) ensure that the responsibilities and obligations of both parties are clearly documented in a terms of business document signed by all parties. Then conduct regular ongoing reviews with representatives from the firm – above all maintain an open dialogue and challenge the DFM on your client’s behalf – a good DFM should be able to meet your challenges. If they fail then.
Ultimately it is probably better to create your own process. There are a lot of consultancy firms that can provide you with help and assistance with your due diligence but in the final analysis it is your business that will be held accountable by the regulator in the event of any failures. Using independent information to support your process supplied by credible third parties can be invaluable but it is probably wise to avoid shifting your responsibilities entirely on to a third party. Only you should be making decisions that directly affect your business and the clients that you look after.
The critical principle behind effective due diligence is to ensure that the DFM(s) being reviewed are capable of meeting the criteria that you, as the adviser, set for your own client and business requirements. The DFM(s) under consideration should be able to answer your questions satisfactorily. You can use your own RFI/DDQ to put those questions to the DFM. Responses can and should be verified against independent third party sources of information such as those from ARC/Defaqto or three-sixty who will be able to provide factual information and independent opinion around investment performance, service proposition, processes and controls. DFMs should also be able to provide information around their processes and controls provided via an independent audit report.
Your research process should not stop at this point. You need to get under the bonnet of the marketing blurb and be comfortable that the information provided covers everything you have requested and is factual. This requires a meeting or series of meetings with a range of personnel at the firm to question and challenge the information if necessary. For example, the DDQ may state that they run specialist mandates such as ethical or AIM portfolios. What you need to assess at this stage is whether this is a core competency or are they simply being accommodating?
DFMs have access to a much more diverse investment universe and have specialist Research teams and dedicated Investment Managers. This enables them to focus on the pro-active management of your client’s portfolio releasing time for you to address each client’s broader financial needs.
Contact us to discuss your client's requirements
If you would like more information, we would be happy to discuss your client’s requirements with you in more depth.
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