Surveys
Word Of Mouth Is Strongest Route To Discretionary Wealth Managers For Advisors - UK Survey
UK financial advisors often rely on personal contact in deciding which discretionary wealth managers to use, a survey suggests.
A high proportion of wealth advisors rely on personal contacts
when choosing a discretionary investment manager, while one in
five never review existing relationships, suggesting considerable
inertia, research from Diminimis, a UK research and
consultancy firm, has found.
Data comes from research carried out in April and May this year;
over 125 independent financial advisors responded.
More than half of advisors (56 per cent) use only one
discretionary investment manager; around a third use two
to three such entities (35 per cent). Just one in ten
use four or more (10 per cent).
Some 28 per cent of advisors rely on recommendations or personal
contacts to select and review a DIM; 44 per cent rely on external
research tools and one in five create their own
questionnaire.
“There is an urgent need for an industry standard that is a
robust, yet efficient way for advisors to be able to review,
screen and select discretionary investment managers. This will
hugely reduce business risk and minimise the time and effort
spent on initial qualitative research and due diligence. The
proportion that use just one discretionary management firm, rely
on personal contacts and external research tools and never review
existing relationships suggest this process is not well
understood or is too complex and time consuming,” said David
Gurr, founding director of Diminimis.
Some 17 per cent of respondents said they never review existing
DIM relationships. Six in ten (59 per cent) review this
annually; one in five (19 per cent) every six months, and
just over one in 20 (6 per cent) every three years.
Increasing numbers of advisors now use DIMs, the survey said, at
57 per cent up from 51 per cent six months ago. More than
three-quarters of advisors (78 per cent) expect their use of
discretionary investment will increase or stay the same in the
future, the survey found.
Diminimis partnered with the Personal Finance Society to produce
the question sets.
