Tatton Investment Management has been named as the most recommended DFM provider for advisers, according to Defaqto’s newly released annual DFM Satisfaction Study 2024.
The firm was followed by Brooks Macdonald and Waverton Investment Management.
Alongside being the most recommended provider overall, Tatton Investment Management also topped Defaqto’s list of preferred providers for MPS via a platform and for MPS direct custody. Waverton Investment Management came in as the second most preferred provider for MPS via a platform, followed by RBC Brewin Dolphin, AJ Bell and LGT Wealth Management.
Meanwhile, advisers’ preferred provider for bespoke DFM is Rathbone Investment Management, followed by Brooks Macdonald, Investec Wealth & Investment, RBC Brewin Dolphin and Quilter Cheviot.
This year’s study found growing demand for MPS solutions, with over two-thirds of advisers accessing an MPS via an adviser platform. Just over half use MPS direct and just under half utilise the bespoke service. Of those advisers that do make use of a bespoke investment service for their clients, 86% also use an MPS. This figure is up from 75% last year.
Defaqto also measured how satisfied advisers have been with their preferred providers and whether their expectations are being met.
Service was the category ranked most important for advisers, overtaking ‘quality of staff – investment’, which ranked first in last year’s study. Rockhold attained the largest number of top performing categories, scoring 12 out of 14, closed followed by Schroder & Co. (10) and Albemarle (9).
The worst performing categories for the year were online facilities, provider brand, quality of literature and remuneration, which saw an average drop in satisfaction scores of two percentage points.
Fraser Donaldson, investment consultant at Defaqto, said: “Quality of literature showed the biggest fall in satisfaction among advisers, which isn’t surprising considering the introduction of the Consumer Duty regulation and the need for clear and transparent communication. Broadly speaking, fewer than a third of advisers felt fully supported by their preferred DFM during this transition and the quality of literature is likely to be a contributing factor.
“The FCA is focusing heavily on this regulation and if advisers feel that the support they are getting is not sufficient to comply with the Consumer Duty, then it is inevitable that they will start to look elsewhere if things do not improve.”
