Discretionary managers keep the client and adviser informed through regular reports, usually issued half yearly or quarterly. Advisers and/or clients can also often access the portfolio, its value and transaction history online. This kind of transparency between adviser and client should lead to a much closer relationship.
Year on year, some observers have seen discretionary management assets grow with almost all discretionary firms (only five have seen a drop in assets).Will this continue? Regulation, the changing face of retail distribution, an understanding of the requirements and worries of advisers and discretionary firms respectively and simply an alternative choice to multimanager funds, have all contributed to the growth of this sector.
Of course, in this era of low interest rates, poor annuity rates and new pension freedoms, we would expect the discretionary industry to continue innovation and develop products and services to cater for this new market. While historically discretionary managers have focused on wealth accumulation and the protection of this wealth from generation to generation, decumulation is a word the firms will quickly get used to in order to compete.
Fraser Donaldson is insight analyst at Defaqto
Key Points
The RDR has been the real catalyst in the growth of discretionary management in the adviser space
Most platforms today have a very wide selection of discretionary portfolios to choose from
We have seen discretionary management assets grow with almost all discretionary firms
