Discretionary Fund Management

Discretionary Fund Managers offer cost effective investment for investors with, typically, over £100,000 to invest. The advantages include:

• Personal contact with an investment manager.
• Investment supported by a large research department. 
• Constant portfolio review and consistent investment processes. 
• Portfolios stay closely aligned to the desired profile.
• Access to funds & assets not normally available to private investors.
• Hands off investment management for the private investor.
• Fund Managers exist ‘closer to the market’ and can switch funds quickly.

Discretionary Fund Management costs vary between managers, but generally they make no charge to invest (or to disinvest) with them and charge an Annual Management fee in the range of 1-1.25%. However, because they tend to deal in ‘institutional units’ of investment funds that may have 0.75% p.a lower fund charges, this reduces the annual cost.

They buy and sell funds with very low or no initial charge, whereas a private investor may incur up to 5% initial charge or ‘bid offer spread’ on every switch between fund management groups.

Comparing a Discretionary Management service to a self managed portfolio needs to account for the true costs of self management before dismissing the discretionary option on cost grounds alone.

We believe ongoing review is essential, Discretionary Fund Management is one tool to achieve this.