The recent boom in MPS means advisers have a huge number of investment providers to choose from. There’s lots of marketing material promising strong performance or the next shiny thing. But what truly differentiates one investment solution from another is not just price, or its purported ability to outperform.
It’s whether the investment manager can prove they deliver consistent and intended outcomes, align with the adviser’s culture and business model, and offer advisers other differentiators as part of the partnership. There are so many DFMs to choose from that advisers should now demand more from them than just investments.
A focus on outcomes
At the heart of any investment proposition lies a simple truth: client outcomes matter most. Advisers must be confident that portfolios will deliver the consistent outcomes needed to meet client objectives. That balance between competitive returns and reliability is essential. Clients do not care about quarterly rankings but whether they are on track to meet their longer-term goals.
Short bursts of outperformance are worth little if they cannot be sustained. Clients expect steady progress towards their goals, and advisers want solutions that keep clients composed and hence, unlikely to disrupt their financial plan.
Working with a DFM should be a frictionless experience. Advisers should not have to redesign their processes to accommodate working with an outsourced investment manager. Instead, portfolios must be available across a wide range of platforms, mapped to all major risk profilers, backed by third-party due diligence, and delivered in a way that slots into their existing workflows.
Service and support are key differentiators
In our experience, service levels are a key differentiator. Ultra-responsive support, access to senior decision-makers, and a collaborative and consultative mindset can make a real difference to advisers managing complex client relationships.
And when it comes to service it’s not just about how quickly you pick up the phone or respond to an email. There is so much more the investment manager should offer as part of that partnership. This includes regular and engaging communications and insights that advisers can share directly with clients, as well as clear reporting tools and technology built to make advisers’ lives easier. These resources not only enhance transparency but also help advisers demonstrate ongoing value to clients.
Then there’s educational resources, whether in the form of written insights, videos, podcasts or even avatars, which enhance both the adviser’s and client’s experience. In addition, facilitating adviser communities where top quality advisers can share ideas and best practice demonstrates a genuine commitment to the long-term success of the advice profession.
A Partnership Mentality
Ultimately, the relationship between advisers and investment providers should be viewed as a partnership. Providers that take time to understand adviser pain points and aspirations and work collaboratively to solve them will build stronger, more sustainable relationships.
Cultural alignment between two firms is also vital. For advisers, partnering with an investment manager that subscribes to the same philosophy gives the relationship a strong foundation and ensures consistency of approach.
The partnership is about working together to deliver better outcomes for the end-client. When providers put themselves in the adviser’s shoes and build solutions with both the adviser and end client in mind, the result is an ecosystem that drives success for all parties.
Demonstrably, the value equation is not simply about performance + cost. It goes far beyond these two metrics.
In a volatile investment environment where client expectations can be unforgiving, and regulatory scrutiny is intensifying, advisers need more than just investment performance. They need solutions that are consistent, comprehensive and easy to integrate. By combining investment expertise with service, communication, and a true partnership approach, advisers can get so much more from their outsourced investment provider.