Some financial advisers offer discretionary investment management as part of their service, while others do not.
To financial advisers, the advantages of including discretionary investment management
To financial advisers, the advantages of including discretionary investment management in their service are:
- Proactive Investment Management: By having the authority to make investment decisions on behalf of clients, financial advisers, in addition to providing financial advice, can be more proactive in their service by managing their clients’ portfolios.
- Increased Control: Discretionary investment management allows financial advisers to take a more hands-on approach to managing their clients’ portfolios, giving them greater control over the investment process and finetuning the investment program per the clients’ Personal Circumstances.
- Improved Client Relationships: Discretionary investment management can help financial advisers build stronger relationships with their clients, allowing them to provide a more comprehensive and integrated approach to financial planning.
- Competitive Advantage: Financial advisers who offer discretionary investment management may have a competitive advantage over those financial advisers who do not provide this service.
- Increased Revenue: Providing discretionary investment management as part of their service can generate additional revenue for a financial adviser.
Financial advisers should remember the following aspects if they were to include discretionary investment management in their service:
- Increased Responsibility: By having the authority to make investment decisions on behalf of clients, financial advisers take on increased responsibility of managing their clients’ portfolios.
- Increased Regulation: Financial advisers who provide the discretionary investment management service are subject to increased regulatory scrutiny and may face additional compliance requirements. This increases the cost and complexity of their business.
Financial advisers and external investment managers
Financial advisers who do not include discretionary investment management as part of their service might suggest their clients select external investment managers to manage the clients’ portfolios. The external investment manager would then be responsible for implementing the investment plan and managing the investments continuously. In this scenario, the financial adviser would typically play an advisory role only.
QuietGrowth and discretionary investment management
QuietGrowth provides discretionary investment management through the Managed Discretionary Account (MDA) structure. Our automated investment management service is commonly known as robo advice. Refer to our Why QuietGrowth page to know the value proposition.
Related information
Also refer to the related knowledge resource:
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