Five DFMs have formed a new partnership to end the perception they are ‘predatory’ and remove mistrust among advisers.

Brewin Dolphin, Brooks Macdonald, Investec Wealth & Investment, Quilter Cheviot and Rathbones this morning revealed the DFM Alliance.

The aim is to offer greater clarity for advisers on outsourcing, its potential benefits for clients and what constitutes best practice.

The group will run free structured CPD conferences in June.

David Miller, investment director at Quilter Cheviot, said: “The DFM Alliance aims both to remove any perceived doubt or mistrust advisers may have that using a DFM may weaken their client relationships, and to give IFAs who wish to use a DFM the right tools to compare. We are all different and it’s important IFAs have a choice.”

James Goward, head of sales support at Rathbones, said: “DFMs are sometimes perceived as expensive, less than transparent and even predatory. It is therefore our aim to educate advisers about how outsourcing can add value and strengthen the outcome for the end client. Conversely, this remains a fluid space, and DFMs have just as much to learn about the changing needs of the advisory world.”

Andrew Denham-Davis, director, business development at Brooks Macdonald, said: “Ten years ago the term DFM was virtually unknown. At this important stage in the growth of the DFM industry we propose to focus our combined experience and resources to address the myths of the industry and emphasise that DFMs complement the adviser’s role. Gaining recognition that working with us can improve the efficiency of the adviser business and customer outcome is absolutely crucial.”

Lucie Gordon, senior business development manager at Brewin Dolphin, said: “The burdens on IFAs are huge. We want to help IFAs carry these burdens through helping with their investment, regulatory and risk processes. Of course, outsourcing to a DFM may not be the right solution for everyone, but the formation of the DFM Alliance is testament to our commitment to making sure IFAs have the information they need to make this decision.”

Mark Stevens, head of intermediary services at Investec Wealth & Investment, said: “The formation of the DFM Alliance will help address the changing role of the adviser in recent years. Clients are looking for broader, holistic advice and are more amenable to the adviser outsourcing in order to gain access to a greater level of investment expertise. Managing investments is a full time job, particularly at a time when it is harder to make good returns with appropriate levels of risk.”

Mr Goward of Rathbones added: “Conversely, this remains a fluid space, and DFMs have just as much to learn about the changing needs of the advisory world.”

The DFM Alliance said it is committed to:

· educating advisers on the benefits of outsourcing investment management

· providing a knowledge base for advisers to draw upon when undertaking DFM due diligence

· working collaboratively with advisers to assist in improving business practices for the benefit of the end client

· debunking the myths around working with a DFM and what it means