3 critical (but often-overlooked) benefits of partnering with a DFM

By: Daniel Schoeman, CFA, CIO, Analytics Multi-Manager

Daniel Schoeman

Financial advisers understand the value of time. Every minute spent managing investments is a minute taken away from building relationships with current clients, meeting with prospective clients or growing their advisory business, Yet, investment management remains a core competency for many advisors. Any time spent on investment management may start to hinder growth and limit the ability to serve clients effectively. This is where partnering with a DFM can be a game-changer. Beyond the well-known benefits of investment expertise and portfolio diversification, DFMs also offer three often-overlooked benefits that can significantly enhance financial advisers’ practices: Time; Freedom; Peace of mind.

Time

Client consultations, financial planning and ongoing market research can easily consume the typical workday of a financial advisor. Partnering with a DFM alleviates this burden by delegating the time-intensive task of investment management. DFMs are responsible for investment research, portfolio construction, ongoing monitoring and rebalancing – freeing up valuable hours. This reclaimed time empowers an advisor to: Deepen client relationships: Instead of being bogged down by investments, they can dedicate more time to building stronger relationships with their clients. More time to focus on understanding clients’ evolving needs, providing financial guidance, and crafting personalised wealth management strategies.

Expand their client base: With a DFM managing investments ,they’ll have the bandwidth to take on new clients and grow their business. Advisors may then utilise the freed-up time for prospecting, networking and building a robust referral network. Sharpen their expertise: Dedicating time to professional development allows advisors to stay ahead of the curve. Advisors will have time to attend industry conferences, delve into complex financial concepts, and enhance their knowledge base to deliver even greater value to their clients.

Freedom

Financial advisors are often tethered to their work and clients. Partnering with a DFM untangles these constraints. By delegating investment management, advisors gain the freedom to:
Maintain a healthy work-life balance: Time to pursue hobbies, spend quality time with family, or simply recharge batteries. A refreshed and balanced advisor is better equipped to serve clients effectively.

Explore new business opportunities: With more time on their hands, advisors can delve into unexplored business areas. Avenues to explore include offering specialised financial planning services, launching educational workshops, or writing a book to establish themselves as thought leaders.

Pursue personal goals: Advisors can travel the world, learn a new skill, or volunteer for a cause they care about. A fulfilling personal life translates into a more motivated and energised professional.

Peace of mind

Market volatility, client anxieties, and the ever-present risk of underperformance can take a toll on advisors. Partnering with a DFM fosters peace of mind by:
Leveraging investment expertise: DFMs possess a deep understanding of financial markets and investment strategies. Their expertise ensures that clients’ portfolios are managed according to sound principles and best practices.

Mitigating risk through diversification: DFMs are adept at constructing diversified portfolios that align with clients’ risk tolerance and investment goals. This reduces portfolio volatility and protects clients’ wealth.
Providing ongoing communication: DFMs offer regular reports and clear communication, keeping advisors and their clients informed about portfolio performance and investment decisions.

Closing thoughts

Analytics offer so much more than the typical DFM:

  • No one-size-fits-all approach to portfolio construction
  • Access to innovative decision-support systems
  • No minimum asset size needed
  • Opportunities to enhance revenue streams
  • Ability to obtain CPD points effortlessly
  • Access to systems and research
  • Opportunity to progress seamlessly from Cat I to Cat II.

Partnering with Analytics is a strategic decision that extends far beyond simply outsourcing investment management. It’s an investment in advisors’ time, freedom and ultimately, their peace of mind.
By leveraging our expertise, advisors can reclaim control of their schedule, pursue untapped business opportunities and provide their clients with superior service.

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