According to Mr Alexander, some discretionary managers could face difficulties because of the FCA’s move to ban DFM referral fees paid. These are paid by DFMs to advisers for introducing new clients, leaving those with this model having to change it.
He concludes that there has been and will be more consolidation in the DFM industry.
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“There has been a rush to the lowest common denominator in terms of price,” he says.
“If you’re small or sub-scale, you are either bought or you retain the boutique culture and grow, as you can’t charge high prices to balance costs.”
Joanne Ellul is a freelance journalist
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